Economic Development Committee

ECONOMIC DEVELOPMENT COMMITTEE DATE: October 2, 2018 (Tuesday) TIME: 5:30 – 7:30 p.m. LOCATION: Room 209 Portland City Hall 1. Review and accept Minutes of previous meeting held on September 18, 2018. 2. Public Hearing and Vote to Recommend to the Planning Board and City Council a proposed Impact Fee Schedule and Draft Ordinance. a. See enclosed memo and backup material from Jeff Levine. 3. Public Hearing and Vote to Recommend to City Council proposed Portland Policy for Non-Profit Organizations Payment-in-Lieu of Taxes (PILOT) or Services-in-Lieu of Taxes (SILOT). a. See enclosed memo and backup material from Brendan O’Connell. Councilor Justin Costa/Chair NOTE: No public comment will be taken on non-action items. Next Meeting: October 16, 2018 CITY OF PORTLAND/ECONOMIC DEVELOPMENT DEPT./389 CONGRESS ST./PORTLAND, ME 04101/(207) 874-8683  Minutes Economic Development Committee September 18, 2018 NOTE: These meetings are now live-streamed, which can be viewed at this link: http://www.portlandmaine.gov/1695/Economic-Development-Committee These Minutes provide a record of those in attendance, general discussion taking place, and motions made. A meeting of the Economic Development Committee (EDC) of the Portland City Council was held on Tuesday, September 18, 2018 at 5:30 p.m. in Room 209 of Portland City Hall. Present from the Committee was its Chair Councilor Justin Costa and members Councilors Nicholas Mavodones and Spencer Thibodeau. Present from the City staff were Public Works Director Christopher Branch, Senior Planner Nelle Donaldson, Associate Corporation Counsel Michael Goldman, City Manager Jon Jennings, Economic Development Director Greg Mitchell, Planning Division Director Tuck O’Brien, Finance Director Brendan O’Connell, and Senior Executive Assistant Lori Paulette. Waterfront Coordinator Bill Needelman arrived as noted herein. Item #1: Review and accept Minutes of previous meeting held on September 4, 2018. On motion made by Councilor Mavodones, seconded by Councilor Thibodeau, the Committee voted unanimously to accept the Minutes as presented. Item #2: Review and discuss possible Portland Impact Fee Ordinance. Councilor Costa noted that this was an update for the Committee on a possible Impact Fee Ordinance; the Committee also reviewed this this past June. 1  Mr. Levine concurred, and noted that this would provide a systematic and design plan associated with Portland’s future growth. It is detailed work in finalizing impact fee numbers and how it will be administered. Mr. Levine noted that the Planning Board will be holding a workshop on this on 9/20/2018; the City Council will have a Workshop on this on 9/24/2018, followed by public hearings with this Committee, the Planning Board, and the City Council when it reviews and votes on this. He then introduced the City’s consultant Carson Bise of Tischler Bise. Mr. Bise described the process to date, including meetings with stakeholders in the community, which have caused for revisions to the proposed fees, which is common. Impact Fees (IF) are a one-time fee at time of building permit or Certificate of Occupancy (COO). If there is a lot growth, the City would collect more. IFs are based on three things: need; benefit; and, proportionate. They are a predictable tool for both the City and the development community. The proposed IFs for Portland are based on Parks and Recreation, Transportation, and Wastewater impacts. He then described the methodology for each and how the fees were arrived at. He noted that all three fees are lower than when first presented to the EDC based on stakeholder input, and all proposed fees are “maximum defensible fees”. He explained the work done with City staff to estimate future capital projects and then the methodology for IFs to assist with funding a portion of those projects. (See attached PowerPoint Mr. Bise displayed at the meeting.) Ms. Donaldson also noted in the packet that there was a Memo from Finance Director Brendan O’Connell and Assessor Christopher Huff responding to frequently asked questions. Referring to the draft IF Ordinance, Ms. Donaldson said that it is based on State statute and 2 other best practices. There are rules for administration, fee collecting, and accounting of funds and provides for efficiencies. Councilor Thibodeau asked if neighborhoods were represented, and Ms. Donaldson said that they were including India Street, Bayside, and Stroudwater. Councilor Mavodones was pleased with the outreach to the stakeholders and requested to see a list of those who participated. Councilor Thibodeau asked if these proposed IFs were at the ceiling, and Mr. Bise said that they were at this time the “maximum defensible fee”. Mr. Bise also noted that the City could revisit these fees after three years, while also noting that all IFs should be re-evaluated every five years. Chair Costa agreed, particularly when there is real debt service added, and Ms. Donaldson also noted there is an escalator clause in the proposed Ordinance. Councilor Mavodones asked if there are any waiver possibilities, and Ms. Donaldson noted that there are for affordable housing projects. Chair Costa asked about implementation if passed, and Mr. Levine said that, depending on the public hearings and votes, the IF would be paid either at the building permit application stage or when the COO is approved. Staff is fine with the latter, and then the IF payments would be placed in a fund for projects. Mr. Jennings thanked staff for all the work done. IFs are very important to the City and he is hopeful this will get adopted. Chair Costa thanked staff as well for the work and the update today. It is anticipated that the EDC will have a public hearing on this at its next meeting. 3  Item #3: Review and vote to recommend to the City Council Assignment of a portion of the McAuley Tax Increment Financing (TIF) Credit Enhancement Agreement (CEA). Mr. Mitchell said that this is a partial assignment of the CEA due to ownership changes, noting that Matthew Teare was in attendance representing ownership. There is no change to the CEA, just an assignment which is a routine item allowed in the CEA. Mr. Mitchell noted that the property was entirely tax exempt at the time of the TIF in 2009, and is now privately owned and on the tax roll. The CEA has 60% of the taxes from the increased assessed value going to the project, and 40% to the City General Fund. Although the TIF District became effective in 2009, the project was dormant until recently and FY18 is the first year of a TIF payment. This CEA expires FY2039. Chair Costa opened the meeting for public comment. Karen Snyder questioned how the public would know if there is public comment on items. Mr. Teare said that this TIF CEA was an essential component for this senior housing project, protecting a landmark in Portland. He noted that the former Maine Girls Academy is now under consideration for future developments. In addition, the playing fields are being used by the City at no cost. Seeing no further public comment, the Chair closed the public comment session. Chair Costa said that the Agenda notes, at the bottom, “No public comment will be taken on non-action items.” Action items are those items that the Committee would be voting on. 4  Chair Costa said that this project is in his district and applauded the developers and Committee members concurred. Councilor Thibodeau then made a motion to forward this to the City Council with a recommendation for approval. Councilor Mavodones seconded the motion and it passed unanimously. Item #4: Review and vote to recommend to the City Council the proposed Real Estate Option to sell Lot 1 located in the Portland Technology Park Mr. Mitchell said that this Real Estate Option for sale of Lot 1 would be with Capricorn Products, a biotech company currently located on Rice Street on Portland. Capricorn is expanding and this location fits their needs. The purchase price is proposed at $420,000, with the Real Estate Option at $5,000. Capricorn would build a 15,000 to 18,000 sq. ft. building. Chair Costa opened the meeting for public comment. Ms. Snyder asked if the $420,000 for the 3.4 acres was discounted as was the Thames Street sale by the City. Seeing no further public comment, the Chair closed the public comment session. Mr. Mitchell said the purchase price was determined to be fair market value. He also noted that there was no broker involvement so no commission needs to be paid. Mr. Jennings said that the Thames Street appraisal first came in at higher price but it was based on infrastructure already in place and it was not already in place. Thus, the revised appraisal came in lower. Councilor Thibodeau asked about the purchase prices for the other lots, and Mr. Mitchell said that they are working with a new broker now and will discuss that with them. 5  Councilor Thibodeau then made a motion to forward this to the City Council with a recommendation for approval; Councilor Mavodones seconded the motion. Mr. Mitchell noted that Capricorn owner, Jane Havey, just arrived. Ms. Havey said that they very much appreciate the option for the real estate. They are growing substantially, and this is a good location for Capricorn to grow and expand. Chair Costa said that this Committee has discussed negotiations in executive session and thanked staff for bringing this forward and for Capricorn to grow and expand there; Committee members concurred. A vote was then taken on the motion and it passed unanimously. Item #5: Review and Vote to Recommend to City Council Proposed Amendments to the following Three Area-wide Tax Increment Financing (TIF) Districts and Ordinance: a. Bayside TIF District to expand allowable public investment options of TIF District revenue; b. Downtown Transit Oriented Development TIF District to increase the annual TIF District capture rate and expand allowable public investment options of TIF District revenue; c. Waterfront TIF District to expand allowable public investment options of TIF District revenue and geographic expansion of the TIF District; and, d. Ordinance Amendment to Waterfront Capital Improvement and Economic Redevelopment Zone to expand the “growth” area for future Waterfront TIF District expansion to include the western waterfront from the Casco Bay Bridge to Sprague Energy. Note: See enclosed three memos from Greg Mitchell – one for each TIF District. Chair Costa noted that the Committee discussed these items at length at their last meeting so the Committee is very familiar with what is being recommended by staff. These are public TIFs and the proposed amendments would increase the allowable uses for municipal TIF revenue investment, and, for the Downtown TOD TIF, would increase the capture rate to up to 100%. He also noted that the tax sheltering value involved with TIFs is very important. 6  Mr. Mitchell said that the proposed amendments for the Bayside TIF (BTIF) are only to increase the allowable uses for municipal TIF revenue investment. The proposed amendments for the Downtown TOD TIF are the same as the BTIF, plus recommending to increase the allowable capture rate from up to 22% to up to 100%. He also noted that the City does not have to capture 100%, which capture rate is discussed annually during the budget process and set according to the City’s needs at that time. Mr. Mitchell handed out an updated spreadsheet showing the 100% capture for the remaining Downtown TOD TIF term. The original packet had duplicate tax sheltering spreadsheets, and the City website was updated earlier with this spreadsheet he handed out. Councilor Thibodeau noted that the City could, after this TIF has expired, create a new one for 30 years. Mr. Mitchell said that the City could and would have to establish a new original assessed value at that time. Mr. Mitchell said that the proposed amendments to the WTIF also increase the allowable uses of municipal TIF revenue investments, adds new parcels to the District, and expands the TIF growth area west up to the Sprague property. He then showed this on a map, which also included adding a portion of Fore Street to the east. This was added, from the map that was in the Committee packet, due to future infrastructure improvements anticipated to be needed. Mr. Jennings noted that the Old Port area is nearing 100% sewer capacity so Fore Street can help mitigate that with infrastructure upgrades. Councilor Mavodones said that because the Committee discussed these area wide TIF amendments at length at its prior meeting, he and others on the Committee are well versed and provided this direction to staff. He supports the proposed amendments. 7  Mr. Mitchell said the WTIF amendments would have a companion order to amend the WREZ ordinance and expand the growth area for the WTIF. Chair Costa asked about timing of the TIF District amendments, and Mr. Mitchell suggested that they be on the Council Agenda on October 1, 2018, for a first reading, and then October 15, 2018, for a public hearing and vote. If approved, they would then be sent to MDECD for review and final approval. Councilor Thibodeau asked about statutory limits for TIF values and acreage, and Mr. Mitchell noted that with the WTIF additional parcels, the City remains well within the statutory limits. Chair Costa opened the meeting for public comment. Seeing none, the Chair closed the public comment session. Councilor Mavodones made a motion to forward the amendments to the BTIF to the City Council with a recommendation for approval. Councilor Thibodeau seconded the motion, and it then passed unanimously. Councilor Mavodones made a motion to forward the amendments to the Downtown TOD TIF to the City Council with a recommendation for approval. Councilor Thibodeau seconded the motion, and it then passed unanimously. Councilor Mavodones made a motion to forward the amendments to the WTIF to the City Council with a recommendation for approval. Councilor Thibodeau seconded the motion, and it then passed unanimously. Councilor Mavodones made a motion to forward the amendments to WREZ to the City Council with a recommendation for approval. Councilor Thibodeau seconded the motion, and 8 it then passed unanimously. Councilor Thibodeau thank staff for the backup and work on these amendments; Councilor Mavodones agreed. Chair Costa noted that staff has been very responsive to push these amendments along, noting its importance to the City in shielding property value that has impact on the school funding formula, municipal revenue sharing from state, and county tax, as well as on the City budget for more allowable uses of municipal TIF revenue investments, including workforce development. Item #6: Executive Session: pursuant to 1 M.R.S.A. 405(6)(C), the Committee will go into executive session to provide staff guidance related to the following: negotiations for extension of Lease Agreement with Casco Bay Island Transit District (CBITD). Councilor Mavodones said that he has a conflict of interest to participate in this item as CBITD is his employer; he then left the meeting. Councilor Thibodeau then made a motion to go into executive session pursuant to 1 M.R.S.A. 405(6)(C) to provide staff guidance related to negotiations for extension of Lease Agreement with Casco Bay Island Transit District (CBITD). Chair Costa seconded the motion and it passed unanimously (2-0) at approximately 7:08 p.m. At approximately 7:20 p.m., the Committee came out of executive session and the meeting then adjourned. Respectfully, Lori Paulette 9 Impact Fee Study Overview REVISED PRELIMINARY MAXIMUM DEFENSIBLE FEE CALCULATIONS City of Portland, ME September 18, 2018  City of Portland Impact Fee Study o Impact Fee Fundamentals o Changes Made Based on Comments of 1st Draft Fees o Parks & Recreation o Transportation o Wastewater TischlerBise | www.tischlerbise.com 2  Impact Fee Fundamentals o One-time payment for growth-related infrastructure, usually collected at the time buildings permits are issued o Can’t be used for operations, maintenance, or replacement o Not a tax but more like a contractual arrangement to build infrastructure, with three requirements: o Need (system improvements, not project-level improvements) o Benefit oShort range expenditures oGeographic service areas and/or benefit districts o Proportionate o Compared to negotiated agreements, streamlines approval process with known costs (predictability) TischlerBise | www.tischlerbise.com 3  Impact Fee Fundamentals o In Maine, authorized under the Comprehensive Planning and Land Use Regulation Act of 1987, Title 30-A MRSA, Section 4354 Brewer Lewiston Pownal Gorham Windham Brunswick Scarborough Freeport Berwick Saco York TischlerBise | www.tischlerbise.com 4  Changes Since 1st Draft o Parks & Recreation o Incremental expansion methodology has been expanded to include nonresidential demand on facilities. o Workers use Parks & Recreation facilities during breaks and lunch. o The vehicle component was removed. o Adjusted facilities included in the level of service calculations. Parks & Rec Parks & Rec Increase/ Development Type 1st Draft Revised Draft Decrease Residential (per housing unit) Single Family/Duplex $2,442 $1,126 ($1,316) Multifamily $1,631 $752 ($879) Nonresidential (per 1,000 square feet) Retail & Service - $534 $534 Office - $677 $677 Industrial - $363 $363 Institutional - $645 $645 Accommodation (per hotel room) Hotel $1,898 $875 ($1,023) TischlerBise | www.tischlerbise.com 5  Changes Since 1st Draft o Transportation o Revised methodology to include five nonresidential land use categories. o Adjusted multimodal projects included in the plan-based methodology. Transportation Transportation Increase/ Development Type 1st Draft Revised Draft Decrease Residential (per housing unit) Single Family/Duplex $3,698 $2,159 ($1,539) Multifamily $1,752 $1,023 ($729) Nonresidential (per 1,000 square feet) Hospital $5,280 - - Congregated Care/Assisted Living $2,065 - - School $9,615 - - Place of Assembly $3,422 - - Retail & Personal Services $14,132 - - Recreational $14,197 - - Office $4,797 - - Industrial $2,443 - - Industrial Transportation $691 - - Retail & Service - $8,248 - Office - $2,800 - Industrial - $1,130 - Institutional - $3,082 - Accommodation (per hotel room) Hotel $4,118 $2,404 ($1,714) TischlerBise | www.tischlerbise.com 6  Changes Since 1st Draft o Wastewater o Included additional projects into future debt payments, increasing the Debt Service Credit. Meter Size Wastewater Wastewater Increase/ (inches) 1st Draft Revised Draft Decrease All Development (per meter) 5/8 $2,069 $1,886 ($183) 3/4 $3,104 $2,829 ($275) 1 $5,173 $4,715 ($458) 1.5 $10,345 $9,430 ($915) 2 $16,552 $15,088 ($1,464) 3 $33,104 $30,176 ($2,928) 6 $103,450 $94,300 ($9,150) 8 $165,520 $150,880 ($14,640) TischlerBise | www.tischlerbise.com 7  Parks & Rec Impact Fee Analysis o Consumption-Based/Incremental Expansion Methodology PARKS & RECREATION IMPACT FEE Residential & Nonresidential Development Persons per Household/Hotel Room Multiplied By Net Capital Cost per or Jobs per 1,000 Square Feet Person/Job Parks Cost per Person/Job Single-track Trails Cost per Person/Job Recreational Facilities Cost per Person/Job Credit for Future Debt Payment per Person/Job TischlerBise | www.tischlerbise.com 8  Parks & Rec Impact Fee Analysis o Park Component – Existing Level of Service & Cost per Demand Unit Basketball Community Dog Park Base/Softball Pickleball Acres Athletic Field Baseball Field Courts Gardens Area Fields Courts City of Portland Total 316.3 5.0 11.0 10.0 8.0 2.0 2.0 4.0 Average Replacement Cost $59,172 $350,000 $175,000 $45,000 $30,000 $50,000 $175,000 $45,000 Replacement Cost Subtotal $18,716,104 $1,750,000 $1,925,000 $450,000 $240,000 $100,000 $350,000 $180,000 Volleyball Picnic Tables Playgrounds Pools Skate Park Softball Fields Splashpads Tennis Courts Courts City of Portland Total 22.0 18.0 1.0 1.0 4.0 5.0 15.0 2.0 Average Replacement Cost $750 $175,000 $2,000,000 $350,000 $175,000 $30,000 $45,000 $45,000 Replacement Cost Subtotal $16,500 $3,150,000 $2,000,000 $350,000 $700,000 $150,000 $675,000 $90,000 Land Replacement Cost $18,716,104 Total Park Acres 316.3 Improvement Replacement Cost $12,126,500 Total Replacement Cost $30,842,604 Total Replacement Cost $30,842,604 Replacement Cost per Park Acre $97,511 Source: City of Portland Parks and Recreation; Assessor's Office Residential Level-of-Service (LOS) Standard Nonresidential Level-of-Service (LOS) Standard Share of Impact Days 72% Share of Impact Days 28% Share of Impact Days calculation Share of Park Acres 227.7 Share of Park Acres 88.6 found in Appendix. 2018 Peak Population 83,250 2018 Jobs 67,270 LOS: Acre per 1,000 Persons 2.74 LOS: Acre per 1,000 Jobs 1.32 Cost Analysis Cost Analysis Replacement Cost per Acre $97,511 Replacement Cost per Acre $97,511 LOS: Acre per 1,000 Persons 2.74 LOS: Acre per 1,000 Jobs 1.32 Replacement Cost Per Capita $267 Replacement Cost Per Job $129 TischlerBise | www.tischlerbise.com 9  Parks & Rec Impact Fee Analysis o Single-Track Trail Component – Existing Level of Service & Cost per Demand Unit Single-Track Trail Trail (miles) Citywide Passive Trails 36.2 Total 36.2 Source: Ci ty of Portla nd Pa rks a nd Recrea tion Residential Level-of-Service (LOS) Standard Nonresidential Level-of-Service (LOS) Standard Share of Impact Days 72% Share of Impact Days 28% Share of Trail Miles 26.1 Share of Trail Miles 10.1 2018 Peak Population 83,250 2018 Jobs 67,270 LOS: Miles per 1,000 Persons 0.31 LOS: Miles per 1,000 Jobs 0.15 Cost Analysis Cost Analysis Costs per mile $15,000 Costs per mile $15,000 LOS: Miles per 1,000 Persons 0.31 LOS: Miles per 1,000 Jobs 0.15 Replacement Cost per Person $5 Replacement Cost per Job $2 TischlerBise | www.tischlerbise.com 10  Parks & Rec Impact Fee Analysis o Recreational Facility Component – Existing Level of Service & Cost per Demand Unit Square Replacement Recreational Facilities Feet Cost East End Community Center 23,500 $5,875,000 Peaks Island Community Center 2,000 $550,000 Portland Ice Arena 29,273 $3,125,896 Reiche Community Center 25,000 $8,750,000 Riverton Community Center 31,500 $11,970,000 Total 111,273 $30,270,896 Source: Ci ty of Portla nd Pa rks a nd Recrea tion Residential Level-of-Service (LOS) Standard Nonresidential Level-of-Service (LOS) Standard Share of Impact Days 72% Share of Impact Days 28% Share of Rec. Square Feet 80,117 Share of Rec. Square Feet 31,156 2018 Peak Population 83,250 2018 Jobs 67,270 LOS: Square Feet per Person 0.96 LOS: Miles per 1,000 Jobs 0.46 Cost Analysis Cost Analysis Costs per Square Foot $272 Costs per Square Foot $272 LOS: Square Feet per Person 0.96 LOS: Miles per 1,000 Jobs 0.46 Replacement Cost per Person $261 Replacement Cost per Job $125 TischlerBise | www.tischlerbise.com 11  Parks & Rec Impact Fee Analysis o Credit for Future Debt Payment Component o To avoid future growth double paying for Parks & Rec facilities, a credit is necessary for future debt payments. Residential Credit Nonresidential Credit Projected Payment/ ProjectedPayment/ Fiscal Year Payment Fiscal Year Payment Population Capita Jobs Job Base Year $617,060 83,250 $7.41 Base Year $239,968 67,270 $3.57 2019 $715,720 83,678 $8.55 2019 $278,336 67,959 $4.10 2020 $676,719 84,106 $8.05 2020 $263,169 68,648 $3.83 2021 $628,339 84,534 $7.43 2021 $244,354 69,337 $3.52 2022 $606,452 84,962 $7.14 2022 $235,842 70,026 $3.37 2023 $554,947 85,390 $6.50 2023 $215,813 70,715 $3.05 2024 $478,117 85,818 $5.57 2024 $185,935 71,404 $2.60 2025 $461,771 86,246 $5.35 2025 $179,578 72,093 $2.49 2026 $434,672 86,673 $5.02 2026 $169,039 72,782 $2.32 2027 $386,672 87,101 $4.44 2027 $150,372 73,471 $2.05 2028 $364,280 87,529 $4.16 2028 $141,665 74,160 $1.91 Total $5,924,749 $69.62 Total $2,304,071 $32.81 Discount Rate 3.00% Discount Rate 3.00% Total Credit $60 Total Credit $28 Source: Ci ty of Portla nd Fi na nce Depa rtment Source: Ci ty of Portla nd Fi na nce Depa rtment TischlerBise | www.tischlerbise.com 12  Parks & Rec Impact Fee Analysis o Maximum Defensible Fee Fee Cost Cost Component per Person per Job Parks $267 $129 Single-Track Trails $5 $2 Rec. Facilities $261 $125 Debt Service Credit ($60) ($28) TOTAL $473 $228 Residential (per housing unit) Persons per Maximum Type of Unit Household Defensible Fee Single Family/Duplex 2.38 $1,126 Multifamily 1.59 $752 Nonresidential (per 1,000 square feet) Jobs per 1,000 Maximum Type of Unit Square Feet Defensible Fee Retail & Service 2.34 $534 Office 2.97 $677 Industrial 1.59 $363 Institutional 2.83 $645 Nonresidential (per room) Persons per Maximum Type of Unit Room Defensible Fee Hotel 1.85 $875 TischlerBise | www.tischlerbise.com 13  Parks & Rec Impact Fee Analysis o Parks & Recreation Fee Revenue Total Cost to Cost Attributable Maintain LOS to Growth Parks $1,950,220 $1,950,220 Single-Track Trails $34,500 $34,500 Rec Facilities $1,979,344 $1,979,344 Total Expenditures $3,964,064 $3,964,064 Projected Development Impact Fee Revenue Capital Cost Capital Cost per Person per Job $473 $228 Year Population Jobs Base 2018 83,250 67,270 Year 1 2019 83,678 67,959 Year 2 2020 84,106 68,648 Year 3 2021 84,534 69,337 Year 4 2022 84,962 70,026 Year 5 2023 85,390 70,715 Year 6 2024 85,818 71,404 Year 7 2025 86,246 72,093 Year 8 2026 86,673 72,782 Year 9 2027 87,101 73,471 Year 10 2028 87,529 74,160 Ten-Year Increase 4,279 6,890 Projected Revenue => $2,023,810 $1,570,948 Projected Revenue => $3,594,757 Total Expenditures => $3,964,064 General Fund's Share => $369,307 TischlerBise | www.tischlerbise.com 14 Transportation Impact Fee Analysis o Plan-Based Methodology – Person Trips TRANSPORTATION IMPACT FEE Residential & Nonresidential Development Average Weekday Person Trip Ends by Land Use Multiplied by Adjustment Factors Multiplied by Capital Cost Per Person Trip Plan-Based Capital Cost Capacity Improvements to Multimodal Facilities Capacity Improvements to Signals Credit for Future Debt Payment TischlerBise | www.tischlerbise.com 15 Transportation Impact Fee Analysis o Multimodal Component – High Readiness Projects Length of Project Growth's Project Readiness (linear feet) Total City Cost Share Growth's Cost W. Commercial Street Path High 5,000 $750,000 50% $375,000 Thames Street High 1,200 $1,450,000 25% $362,500 Franklin Street: I-295 to Somerset High 700 $4,050,000 75% $3,037,500 Congress Square Intersection Construction High 650 $1,300,000 25% $325,000 Marginal Way: Hanover to Plowman High 5,600 $1,000,000 25% $250,000 Kennebec Street Realignment at Forest Avenue High 450 $500,000 50% $250,000 Somerset Street High 1,800 $1,500,000 50% $750,000 Forest Avenue (Morrill's Corner Intersections) High 1,600 $2,280,000 50% $1,140,000 Brighton Avenue High 13,000 $1,100,000 25% $275,000 Washington Avenue Rehabilitation High 1,500 $2,000,000 25% $500,000 TOTAL 31,500 $15,930,000 $7,265,000 Growth's Cost of Transportation Projects $7,265,000 10-Year Increase in Average Daily Person Trips 47,721 Capital Cost per Trip $152 TischlerBise | www.tischlerbise.com 16 Transportation Impact Fee Analysis o Signal Component – High Readiness Projects Project Readiness Total Cost Growth's Share Growth's Cost Modernize Signal Systems High $9,375,000 75% $7,031,250 Arterial Street Crossings High $2,000,000 50% $1,000,000 TOTAL $11,375,000 $8,031,250 Growth's Cost of Transportation Projects $8,031,250 10-Year Increase in Average Daily Person Trips 47,721 Capital Cost per Trip $168 TischlerBise | www.tischlerbise.com 17 Transportation Impact Fee Analysis o Credit for Future Debt Payment Component o To avoid future growth double paying for Transportation facilities, a credit is necessary for future debt payments. Projected Payment/ Fiscal Year Payment Ave. Daily Person Trip Person Trips Base Year $3,751,763 735,171 $5.10 2019 $4,314,139 739,943 $5.83 2020 $4,060,134 744,715 $5.45 2021 $3,772,123 749,487 $5.03 2022 $3,633,359 754,260 $4.82 2023 $3,323,658 759,032 $4.38 2024 $2,916,044 763,804 $3.82 2025 $2,815,726 768,576 $3.66 2026 $2,591,944 773,348 $3.35 2027 $2,374,976 778,120 $3.05 2028 $2,147,023 782,892 $2.74 Total $35,700,889 $47.24 Discount Rate 3.00% Total Credit $41.00 TischlerBise | www.tischlerbise.com 18 Transportation Impact Fee Analysis o Maximum Defensible Fee – High Readiness only Input Variables Cost per Trip for Multimodal Projects => $152 Cost per Trip for Signals => $168 Debt Service Credit per Trip => ($41) Capital Cost per Person Trip $279 Avg Wkdy Person Trip Rate Maximum Development Type Trip Ends Adjustment Defensible Fee Residential (per housing unit) Single Family/Duplex 13.34 58% $2,159 Multifamily 6.32 58% $1,023 Nonresidential (per 1,000 square feet of floor area) Retail & Service 77.80 38% $8,248 Office 20.07 50% $2,800 Industrial 8.10 50% $1,130 Institutional 22.09 50% $3,082 Nonresidential (per room) Hotel/Motel 17.23 50% $2,404 TischlerBise | www.tischlerbise.com 19 Transportation Impact Fee Analysis o Transportation Impact Fee Revenue Cost Attributable Total Cost to Growth Multimodal Projects $15,930,000 $7,265,000 Signals $11,375,000 $8,031,250 Total Expenditures $27,305,000 $15,296,250 Projected Transportation Impact Fee Revenue Retail & Single Family Multifamily Service Office Industrial Institutional Year Housing Units Housing Units 1,000 Sq. Ft. 1,000 Sq. Ft. 1,000 Sq. Ft. 1,000 Sq. Ft. Base 2018 21,047 16,575 9,817 9,318 7,225 8,909 Year 1 2019 21,080 16,829 9,874 9,403 7,289 8,980 Year 2 2020 21,113 17,083 9,931 9,489 7,353 9,050 Year 3 2021 21,147 17,336 9,988 9,574 7,418 9,121 Year 4 2022 21,180 17,590 10,045 9,660 7,482 9,191 Year 5 2023 21,213 17,844 10,102 9,745 7,546 9,262 Year 6 2024 21,246 18,098 10,159 9,830 7,611 9,332 Year 7 2025 21,279 18,352 10,216 9,916 7,675 9,402 Year 8 2026 21,313 18,605 10,273 10,001 7,739 9,473 Year 9 2027 21,346 18,859 10,330 10,087 7,804 9,543 Year 10 2028 21,379 19,113 10,387 10,172 7,868 9,614 Ten-Year Increase 332 2,538 571 854 643 704 Transportation Impact Fee $2,159 $1,023 $8,248 $2,800 $1,130 $3,082 Revenue Subtotal $716,788 $2,596,374 $4,709,608 $2,391,200 $726,590 $2,169,728 Source: Ti s chl erBi s e a na l ys i s Projected Revenue => $13,310,288 Total Expenditures => $15,296,250 General Fund's Share => $1,985,962 TischlerBise | www.tischlerbise.com 20  Wastewater Impact Fee Analysis o Plan-Based Methodology WASTEWATER IMPACT FEE Residential & Nonresidential Development Wastewater Flow from Equivalent Residential Unit (ERU) Multiplied by Capital Cost Per Gallon Plan-Based Capital Cost Growth Related Costs for Capacity Improvements Credit for Future Debt Payment TischlerBise | www.tischlerbise.com 21  Wastewater Impact Fee Analysis o Sewer & Stormwater Component – Future Wastewater Projects Growth's Growth's Project Title Total Share Cost CSO - Close CSO #42 $2,000,000 10% $200,000 CSO - Mackworth Street and Ocean Avenue Sewer Separation Project $6,850,000 10% $685,000 CSO - Dartmouth Street Sewer Separation Project $2,520,000 10% $252,000 CMOM - Inflow and Infiltration Program $4,050,000 50% $2,025,000 CMOM - Pump Station Rehabilitation $3,350,000 25% $837,500 Eastern Waterfront Sewer / Stormwater Extension & Outfall (Thames St) $1,025,000 85% $871,250 Franklin Street Storm Drain $5,300,000 75% $3,975,000 Warren Ave Storm Drain - 517 Warren Ave to 659 Warren Ave $990,000 10% $99,000 TOTAL $26,085,000 $8,944,750 Growth's Cost of Wastewater Projects $8,944,750 10-Year Increase in Wastewater Flow (gallons) 403,049 Capital Cost per Gallon $22.19 TischlerBise | www.tischlerbise.com 22  Wastewater Impact Fee Analysis o Credit for Future Debt Payment Component o To avoid future growth double paying for wastewater facilities, a credit is necessary for future debt payments on past sewer and stormwater projects. Projected Payment/ Fiscal Year Payment Wastewater Gallon Flow (gals) Base Year $4,984,702 5,661,470 $0.88 2019 $5,301,355 5,701,775 $0.93 2020 $5,185,898 5,742,080 $0.90 2021 $5,039,052 5,782,385 $0.87 2022 $4,943,283 5,822,690 $0.85 2023 $4,435,393 5,862,995 $0.76 2024 $4,084,329 5,903,299 $0.69 2025 $4,023,542 5,943,604 $0.68 2026 $3,924,669 5,983,909 $0.66 2027 $3,833,159 6,024,214 $0.64 2028 $3,671,719 6,064,519 $0.61 Total $49,427,101 $8.47 Discount Rate 3.00% Total Credit $7.22 TischlerBise | www.tischlerbise.com 23  Wastewater Impact Fee Analysis o Maximum Defensible Fee Growth Capital Cost per Gallon => $22.19 Debt Service Credit per Gallon => ($7.22) Capital Cost per Gallon of Capacity => $14.97 Max Daily Gallons per ERU => 126 Meter Size Maximum Capacity Ratio (inches) Defensible Fee All Development (per meter) 5/8 1.00 $1,886 3/4 1.50 $2,829 1 2.50 $4,715 1.5 5.00 $9,430 2 8.00 $15,088 3 16.00 $30,176 6 50.00 $94,300 8 80.00 $150,880 Source: American Water Works Association, Principles of Water Rates, Fees, and Charges, M1, 7th ed., 2017; TischlerBise analysis TischlerBise | www.tischlerbise.com 24  Wastewater Impact Fee Analysis o Wastewater Impact Fee Revenue Cost Attributable Total Cost to Growth Wastewater Facilities $26,085,000 $8,944,750 Total Expenditures $26,085,000 $8,944,750 Projected Wastewater Impact Fee Revenue Residential Nonresidential Year Population Jobs Base 2018 83,250 67,270 Year 1 2019 83,678 67,959 Year 2 2020 84,106 68,648 Year 3 2021 84,534 69,337 Year 4 2022 84,962 70,026 Year 5 2023 85,390 70,715 Year 6 2024 85,818 71,404 Year 7 2025 86,246 72,093 Year 8 2026 86,673 72,782 Year 9 2027 87,101 73,471 Year 10 2028 87,529 74,160 Ten-Year Increase 4,279 6,890 Water Demand, per Pop./Job 35.2 40.6 Cost per Gallon $14.97 $14.97 Revenue Subtotal $2,254,793 $4,187,618 Source: Ti s chl erBi s e a na l ys i s Projected Revenue => $6,442,411 Total Expenditures => $8,944,750 General Fund's Share => $2,502,339 TischlerBise | www.tischlerbise.com 25  Comments/Questions TischlerBise | www.tischlerbise.com 26  Comparables o Impact fees from comparable communities nationwide compared to Portland’s Maximum Defensible Fee Maximum National Averages Development Type Defensible Fee Burlington, VT Concord, NH Freeport, ME Bozeman, MT Boulder, CO Eugene, OR (2015)* Parks and Recreation (per housing unit/hotel room/1,000 square feet) Single Family/Duplex $1,126 $1,486 $1,094 - - $5,603 $4,246 $2,812 Multifamily $752 $743 $664 - - $3,936 $2,686 $2,099 Retail $534 $418 - - - - $413 n/a Office $677 $418 - - - - $1,134 n/a Industrial $363 $422 - - - - $694 n/a Institutional $645 $418 - - - - $1,134 n/a Hotel $875 $418 - - - - $1,697 n/a Transportation (per housing unit/hotel room/1,000 square feet) Single Family/Duplex $2,159 $386 $2,110 $1,500 for the first $4,497 $216 $2,113 $3,256 Multifamily $1,023 $196 $1,450 2,500 GFA plus $3,053 $149 $1,226 $2,201 Retail $8,248 $736 $3,330 $300 for each $10,476 $540 $5,093 $5,605 Office $2,800 $676 $1,700 additional 250 $4,535 $220 $3,212 $3,403 Industrial $1,130 $262 $1,090 GFA. Not $2,866 $140 $2,050 $2,063 Institutional $3,082 $676 $2,207 exceeding $5,435 $180 $1,965 n/a Hotel $2,404 $676 $1,817 $30,000. $2,315 $168 $1,268 n/a Wastewater (per meter) Single Family/Duplex $1,886 - - - $775 - $2,396 $3,694 Multifamily $2,829 - - - $1,545 - $2,040 $1,777 Retail $4,715 - - - $3,556 - $683 $663 Office $4,715 - - - $3,556 - $1,036 $640 Industrial $4,715 - - - $3,556 - $687 $642 Institutional $4,715 - - - $3,556 - $2,163 n/a Hotel $4,715 - - - $3,556 - $2,817 n/a *Source: National Impact Fee Survey: 2015, Duncan Associates, November, 2015 Note: Single family units are assumed to be 2,000 square feet and multifamily units to be 1,000 square feet. A 5/8 inch meter is shown for single family development, 3/4 inch for multifamily development, and a 1 inch meter is shown for nonresidential development, however, the wastewater fee will be assessed based on the development's meter size. To estimate general transportation fees for Scarborough, ME the PM peak hour trip generation rates from Trip Generation, Institute of Transportation Engineers, 10th Edition (2017) are used. Not shown in the figure are the additional impact fees the comparable communities assess including school, fire, and police. TischlerBise | www.tischlerbise.com 27  Comparables o Impact fees from surrounding communities compared to Portland’s Maximum Defensible Fee Maximum North Development Type Defensible Fee Brunswick1 Gorham2 Saco3 Berwick Berwick4 Scarborough Freeport Sanford York Lewiston Parks and Recreation (per housing unit/hotel room/1,000 square feet) Single Family/Duplex $1,126 $197 (avg.) $1,715 $1,700 $500/bedro $1,988 - - - - - Multifamily $752 $142 (avg.) $1,108 - $500/bedro $1,317 - - - - - Retail & Services $534 - - - - - - - - - - Office $677 - - - - - - - - - - Industrial $363 - - - - - - - - - - Institutional $645 - - - - - - - - - - Hotel $875 - - - - - - - - - - Transportation (per housing unit/hotel room/1,000 square feet) Single Family/Duplex $2,159 - - - - - - - $1,042/PM $1,500 for the $261 - In certain Multifamily $1,023 - - - - - - - peak hour trip first 2,500 GFA $1,013/PM areas Retail $8,248 - - - - - - - ends (Dunstan), plus $300 for peak hour based Office $2,800 - - - - - - - on $990/PM peak each additional trip, traffic Industrial $1,130 - - - - - - - hour trip ends 250 GFA. Not to depending study Institutional $3,082 - - - - - - - (Haigis Pkwy). exceed $30,000. on location. Hotel $2,404 - - - - - - - Wastewater (meter size, inches) 5/8 $1,886 - - - - - - - $790 3/4 $2,829 - - - - - - - $1,140 Specialized 1 $4,715 - - - - - - - $2,020 sewer $2,500/ 1.5 $9,430 - - $2,700/ - - - - - - assessment $2,500 unit or 2 $15,088 - - 185 gpd - - - - - $8,075 for certain EDU 3 $30,176 - - - - areas - - - $18,165 6 $94,300 - - - - - - - $72,650 8 $150,880 - - - - - - - $129,150 [1] Brunswick has a graduated park impact fee based on size of unit. For purposes of comparison, single family and multifamily fees have been averaged. [2] Gorham has a graduated park impact fee for multifamily units based on size of unit. For purposes of comparison, multi-family fees have been averaged. [3] Saco charges separate recreation and open space fees, which have been combined here. [4] Berwick has a graduated park and recreation impact fee for singlefamily and multifamily units based on number of bedrooms. Fees have been averaged. TischlerBise | www.tischlerbise.com 28  Fee Examples o The table below illustrates the impact fee for several different types of developments. Maximum Development Type Parks & Rec Transportation Wastewaster Defensible Fee Multifamily Rental (75 housing units) $56,400 $76,725 $30,176^ $163,301 Multifamily Condominium (50 housing units) $37,600 $51,150 $30,176^ $118,926 Downtown Hotel (150 bedrooms) $131,250 $360,600 $30,176^ $522,026 Highway/ Suburban Airport Hotel (200 bedrooms) $175,000 $480,800 $30,176^ $685,976 Office (50,000 square feet) + Retail (7,500 square feet) $37,855 $201,860 $15,088* $254,803 Industrial (50,000 square feet) $18,150 $56,500 $15,088* $89,738 Shopping Center (105,000 square feet) $56,070 $866,040 $30,176^ $952,286 Note: The wastewater fee is based on meter size, not level of development. Developments noted with ^ are assumed to have a 3 inch meter. Developments noted with * are assumed to have a 2 inch meter. TischlerBise | www.tischlerbise.com 29  Appendix o Share of Impact Days Calculation o The calculation multiples the number of peak season residents (permanent, seasonal, and visitors) and inflow commuters by the number of days within the City of Portland. o Local workers are included within the total for residents. Residents and Inflow Commuters in 2015 Cumulative Impact Days per Year Cost Allocation for Parks Inflow Residents Residential¹ Nonresidential² Total Residential Nonresidential Commuters 82,049 47,245 29,948,016 11,811,250 41,759,266 72% 28% 1. Da ys per Yea r = 365 365 2. Da ys per Yea r = 250 (5 Da ys per Week x 50 Weeks per Yea r) 250 Source: U.S. Cens us Burea u, OnTheMa p 6.1.1 Appl i ca ti on a nd LEHD Ori gi n-Des ti na ti on Empl oyment Sta ti s ti cs . TischlerBise | www.tischlerbise.com 30  Appendix o To understand the effect of the maximum defensible fees on affordable housing, a household with 80% of the City’s median income is compared to the cost of living. Median Annual Median Annual Household 80% of Median Household Income (2016) Household Income (2018) Income Factor Annual Income Monthly Income $65,571 $68,560 80% $54,848 $4,571 Source: U.S. Cens us Bureau, 2012-2016 American Community Survey 5-Year Es timates ; U.S. Bureau of Labor Statis tics CPI Calculator Current Housing Affordability Condition Monthly Income Monthly Cost Cost Burden Monthly cost of living components for Owner-Occupied $4,571 $1,733 37.9% a owner-occupied unit include: Renter-Occupied $4,571 $1,013 22.2% mortgage payment, property tax, stormwater fee, utilities, digital Housing Affordability with Impact Fees utilities, and homeowners insurance. Condition Monthly Income Monthly Cost Cost Burden Owner-Occupied $4,571 $1,763 38.6% Monthly cost of living for a renter- Renter-Occupied $4,571 $1,023 22.4% occupied unit is from the US Census and adjusted for inflation. Impact Fee Effect on Affordable Housing Condition Change Owner-Occupied 0.7% Renter-Occupied 0.2% TischlerBise | www.tischlerbise.com 31  Appendix o Residential Development Projections o To capture the full demand on City facilities, projections include seasonal and visitor populations o The seasonal population is considered those that have a second home in Portland o The visitor population includes overnight and day visitors to the City Base Year Total 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Peak Population Permanent 67,305 67,644 67,983 68,322 68,661 69,001 69,340 69,679 70,018 70,357 70,696 3,391 Seasonal 7,386 7,432 7,478 7,523 7,569 7,615 7,660 7,706 7,752 7,797 7,843 457 Visitor 8,559 8,602 8,645 8,688 8,731 8,775 8,818 8,861 8,904 8,947 8,990 431 Total 83,250 83,678 84,106 84,534 84,962 85,390 85,818 86,246 86,673 87,101 87,529 4,279 Housing Unit Single Family/Duplex 21,047 21,080 21,113 21,147 21,180 21,213 21,246 21,279 21,313 21,346 21,379 332 Multifamily 16,575 16,829 17,083 17,336 17,590 17,844 18,098 18,352 18,605 18,859 19,113 2,538 Total 37,622 37,909 38,196 38,483 38,770 39,057 39,344 39,631 39,918 40,205 40,492 2,870 Source: Portl a nd's Pl a n 2030; Ti s chl erBi s e a na l ys i s TischlerBise | www.tischlerbise.com 32  Appendix o Nonresidential Development Projections Base Year Total Industry 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Employment Retail 13,057 13,191 13,325 13,458 13,592 13,726 13,860 13,993 14,127 14,261 14,395 1,337 Office 24,772 25,026 25,280 25,533 25,787 26,041 26,295 26,548 26,802 27,056 27,309 2,537 Industrial 9,992 10,094 10,197 10,299 10,401 10,504 10,606 10,708 10,811 10,913 11,015 1,023 Institution 19,449 19,648 19,847 20,046 20,245 20,445 20,644 20,843 21,042 21,241 21,441 1,992 Total 67,270 67,959 68,648 69,337 70,026 70,715 71,404 72,093 72,782 73,471 74,160 6,890 Nonresidential Floor Area (1,000 sq. ft.) Retail 9,817 9,874 9,931 9,988 10,045 10,102 10,159 10,216 10,273 10,330 10,387 571 Office 9,318 9,403 9,489 9,574 9,660 9,745 9,830 9,916 10,001 10,087 10,172 854 Industrial 7,225 7,289 7,353 7,418 7,482 7,546 7,611 7,675 7,739 7,804 7,868 643 Institution 8,909 8,980 9,050 9,121 9,191 9,262 9,332 9,402 9,473 9,543 9,614 704 Total 35,268 35,546 35,823 36,100 36,378 36,655 36,932 37,209 37,487 37,764 38,041 2,773 Source: Portland Area Comprehensive Transportation System (PACTS); City of Portland; TischlerBise analysis TischlerBise | www.tischlerbise.com 33  Appendix o Projected Average Daily Person Trips Base Year Total 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Residential Person Trips Single Family/Duplex 162,904 163,161 163,418 163,675 163,932 164,189 164,446 164,703 164,960 165,216 165,473 2,570 Multifamily 60,830 61,762 62,693 63,625 64,556 65,487 66,419 67,350 68,282 69,213 70,145 9,314 Subtotal 223,734 224,922 226,111 227,299 228,488 229,676 230,865 232,053 233,241 234,430 235,618 11,884 Nonresidential Person Trips Retail 290,177 291,864 293,551 295,238 296,925 298,612 300,299 301,987 303,674 305,361 307,048 16,871 Office 93,550 94,408 95,266 96,124 96,982 97,840 98,698 99,555 100,413 101,271 102,129 8,579 Industrial 29,260 29,520 29,781 30,041 30,302 30,562 30,823 31,083 31,344 31,604 31,865 2,605 Institutional 98,450 99,228 100,006 100,785 101,563 102,341 103,119 103,897 104,676 105,454 106,232 7,782 Subtotal 511,437 515,021 518,604 522,188 525,772 529,356 532,939 536,523 540,107 543,690 547,274 35,837 Grand Total Person Trips 735,171 739,943 744,715 749,487 754,260 759,032 763,804 768,576 773,348 778,120 782,892 47,721 Person Trips by Transportation Mode Total Vehicle Person Trips 611,790 615,750 619,711 623,672 627,632 631,593 635,554 639,514 643,475 647,436 651,396 39,607 Total Transit Person Trips 12,466 12,550 12,633 12,717 12,800 12,884 12,967 13,051 13,135 13,218 13,302 836 Total Non-Motorized Trips 110,915 111,643 112,371 113,099 113,827 114,555 115,283 116,011 116,738 117,466 118,194 7,279 Grand Total Person Trips 735,171 739,943 744,715 749,487 754,260 759,032 763,804 768,576 773,348 778,120 782,892 47,721 Source: Tri p Genera tion, Ins titute of Tra ns portation Engi neers , 10th Edi tion (2017); Na tiona l Hous ehol d Tra vel Survey da ta, 2017; Ti s chl erBi s e a na l ys i s TischlerBise | www.tischlerbise.com 34  Appendix o Average Daily Person Trips by Development Type Trip Person Trips/Unit Person Trip Adjustment Non- Development Type Ends Factor Total Vehicle Transit motorized Single Family/Duplex 13.34 58% 7.74 6.66 0.08 1.01 Multifamily 6.32 58% 3.67 3.16 0.04 0.48 Retail 77.80 38% 29.56 24.24 0.59 4.73 Office 20.07 50% 10.04 8.23 0.20 1.61 Industrial 8.10 50% 4.05 3.32 0.08 0.65 Institutional 22.09 50% 11.05 9.06 0.23 1.76 Hotel 17.23 50% 8.62 7.07 0.17 1.38 Source: Tri p Genera ti on, Ins ti tute of Tra ns porta ti on Engi neers , 10th Edi ti on (2017); Na ti ona l Hous ehol d Tra vel Survey da ta , 2017; Ti s chl erBi s e a na l ys i s Note: Tri p ra tes a re s hown per hous i ng uni t for res i denti a l l a nd us es a nd per 1,000 s qua re feet of fl oor a rea for nonres i denti a l l a nd us es , except Hotel i s s hown per hotel room. TischlerBise | www.tischlerbise.com 35  Appendix o Water Meter Capacity by Size Meter Size Meter Capacity (inches) Capacity Ratio 5/8 20 1.00 3/4 30 1.50 1 50 2.50 1 1/2 100 5.00 2 160 8.00 3 320 16.00 6 1,000 50.00 8 1,600 80.00 Capacity ratios are based on meter capacity standards published by American Water Works Association, Principles of Water Rates, Fees, and Charges, M1, 7th ed., 2017 TischlerBise | www.tischlerbise.com 36 MEMORANDUM PLANNING AND URBAN DEVELOPMENT DEPARTMENT PLANNING DIVISION To: Economic Development Committee From: Nell Donaldson, Senior Planner, Department of Planning & Urban Development Date: September 28, 2018 Re: Proposed Impact Fee Ordinance Meeting Date: October 2, 2018 I. INTRODUCTION Portland’s Plan, the City’s comprehensive plan, lays a strong foundation for future growth in the city over the next ten years. The plan speaks to where and how growth should be managed and suggests mechanisms for funding improvements associated with growth. Among these recommendations, Portland’s Plan proposes impact fees – one time fees charged to development to pay for the infrastructure necessary to accommodate that development. Perceived through this lens, impact fees are fundamentally about planning for smart and sustainable growth in the city – a way to ensure that there is adequate park, recreation facility, and trail capacity; multi-modal transportation capacity; and wastewater capacity to allow the city to grow as envisioned in Portland’s Plan. The City’s Planning Division, with the assistance of the Department of Public Works and the Department of Parks, Recreation, and Facilities, began the process of exploring a city-wide system of impact fees for parks and recreation, transportation, and wastewater in the late winter of this year. In the time since, the Impact Fee Study has produced both draft fees and a draft ordinance, which have been shared and revised over multiple iterations. Altogether, the Impact Fee Study has been reviewed at two meetings of an informal stakeholder group convened for the study (see list of members in Attachment 1), three workshops of the Economic Development Committee (Attachments 2, 3, and 4), two workshops of the Planning Board, and one workshop of the City Council. The intent of this hearing is to provide an opportunity for the Economic Development Committee to review the final draft impact fee ordinance, including a proposed fee schedule, and vote on a recommendation to forward this ordinance to the Planning Board. The Planning Board will meet on October 9, 2018 for a hearing on the draft impact fee ordinance. It is anticipated that the Planning Board will vote at this hearing on a recommendation to the City Council. 2. FEE CALCULATIONS On September 18, the Planning Division, with its consultant, TischlerBise, presented a draft set of fee calculations to the Economic Development Committee (Attachment 5). These fee calculations were based on an analysis of infrastructure demand associated with projected growth and the estimated cost of improvements necessary to accommodate that demand (Attachments 6). These fees were subsequently presented to both the Planning Board and the City Council in workshop settings. During these workshops, Councilors and Board members discussed the capital projects which provide the basis for the transportation and wastewater fee calculations, proposed fee levels relative to the cost of growth, how the fees as presented could affect development costs, and how fees might affect land values, among other topics. Economic Development Committee 10/2/18 Proposed Impact Fee Ordinance WHAT ARE IMPACT FEES? What are impact fees? Impact fees are charges paid by new development to fund the cost of providing municipal facilities to serve that development. This idea is premised on the concept that when development occurs, it can bring many benefits, but it also affects the existing infrastructure around it by adding more cars, bikes, and pedestrians to the streets, increasing sewer and stormwater flows into City systems, and infusing additional visitors into the City’s parks and open spaces. In turn, these facilities require additional capital investment. As a result of this thinking, impact fees are widely used throughout the United States. Impact fees have been used in some communities in the United States for the past 50+ years. Where are impact fees? Although impact fees are particularly common in U.S. states that have experienced rapid population growth in the west and south, they are found in the majority of states nationwide. Concord and Manchester, NH have impact fees, as does Burlington, VT. In Maine, the legislature laid the foundation for impact fees with the Comprehensive Planning and Land Use Regulation Act of 1987. In the time since, communities across the state, mostly in southern Maine, have developed and implemented impact fee ordinances. How may impact fees be used? The uses of impact fees vary widely, depending on state enabling legislation, but in all cases impact fees may only be used on capital projects to construct, expand, or replace infrastructure required to serve new development. In Maine, impact fees may be used for transportation projects, public safety facilities, sewer and water systems, parks and open space, and school improvements. Impact fees may not be used to pay for operations or maintenance, and may not be used to address existing deficiencies in these systems. How are impact fees generally derived? Regardless of where impact fees are used, courts have established that there must be a rational nexus and rough proportionality between the type and scale of development and the fee imposed. Per guidance from the former Maine State Planning Office, “the expansion of the facility and/or service must be necessary and must be caused by the development; the fees charged must be based on the costs of the new facility/service apportioned to the new development; and the fees must benefit those who pay.” Given these standards, in order for impact fees to be charged, a community must conduct an analysis that identifies growth-related infrastructure costs and apportions those costs to projected development, often by development type, on a square foot, unit, or per trip basis. The fees presented in late September are those proposed in the final draft ordinance here. It should be noted that these fees represent the second formal draft of the fee calculations, as the initial fee calculations were revised based on feedback from the study’s stakeholder group in late July. The fees in the final draft ordinance are significantly lower than the calculations prepared in the early summer and originally presented to the stakeholder group. It should also be noted that, in addition to gathering feedback on the revised fee calculations from the Economic Development Committee, Planning Board, and City Council in late September, staff has shared the calculations with the stakeholder group and offered to meet with members of the group to review and discuss. Staff also engaged Colliers International, a real estate services firm, to assess the potential impact of the fee calculations on various development types. This analysis found that the impact fees, at the level proposed in the final draft ordinance, generally represent a nominal percentage of total development cost and are projected to have a minimal impact on financial returns across the six project types modeled (Attachment 7). 3. DRAFT ORDINANCE In late September, staff also presented a draft ordinance to the Economic Development Committee, Planning Board, and City Council in workshop settings. This ordinance was developed based on the state impact fee statute; guidance from the former Maine State Planning Office; conversations with Corporation Counsel, the Department of Permitting and Inspections, and Finance; as well as examples from comparable communities both in Maine and nationwide. In the 2 Economic Development Committee 10/2/18 Proposed Impact Fee Ordinance workshop setting, Board members and Councilors discussed impact fee accounting, the process for granting modifications, and waivers for affordable housing. Following the workshops, staff made minor modifications to the draft ordinance primarily to add clarification on some of these process points. This revised final draft has been shared with Corporation Counsel prior to inclusion in this packet (Attachment 8). In addition, staff has prepared a minor amendment to Division 30 of the land use code, designed to extend fee reductions for eligible affordable housing projects to impact fees (Attachment 9). 4. PUBLIC COMMENT Last, it should be noted that, in addition to feedback received through the stakeholder group, staff has received four public comments on the proposed impact fee ordinance (Attachment 10). These comments raise questions about the treatment of parking garages, how the ordinance would align with the city’s smart growth goals, comparable communities with impact fees, the composition of the stakeholder group, and how a fee system would be implemented. 5. ATTACHMENTS 1. List of Stakeholder Group members 2. Memo to the Economic Development Committee, Jeff Levine, Director, Planning & Urban Development Department, 8/31/17 3. Memo to the Economic Development Committee, Nell Donaldson, Planning & Urban Development Department (without attachments), 6/5/18 4. Memo to the Economic Development Committee, Nell Donaldson, Planning & Urban Development Department (without attachments), 9/18/18 5. Revised Preliminary Maximum Defensible Fee Calculations, TischlerBise, 9/24/18 6. Demographic Data and Development Projections for Impact Fee Study, Tischler Bise, 6/5/18 7. Portland Impact Fee Analysis, Colliers International, 9/20/18 8. Proposed Draft Impact Fee Ordinance, 9/26/18 9. Proposed Amendments to Division 30, 9/28/18 10. Public Comment 11. Impact Fee – Questions and Answers from Finance Director & Assessor, 8/12/18 3  Attachment 1 IMPACT FEE STUDY STAKEHOLDER GROUP MEMBERS Quincy Hentzel Chamber of Commerce Paul Peck Chamber of Commerce Tim Soley East Brown Cow Vin Veroneau J.B. Brown Brad Fries Northland Enterprises Erin Cooperrider New Height Group Jonathan Culley Redfern Properties Tyler Norod AVESTA Mike Barton Congress Group Sarah Michniewicz Bayside Neighborhood Association James Loeber India Street Neighborhood Association Tom Hambrick Stroudwater Village Association Sean Dundon City of Portland Planning Board Greg Mitchell City of Portland Economic Development Chris Hall Greater Portland Council of Governments Kara Woldrik Portland Trails  Attachment 2 Memorandum To: Economic Development Committee From: Jeff Levine, Director, Planning & Urban Development Date: August 31, 2017 Re: Impact Fees One of the recommendations of the Comprehensive Plan is to look at a system of Impact Fees for the City as a way of both funding city infrastructure, and providing predictability for developers. This memo outlines what Impact Fees are, how they have been applied elsewhere, and a general approach to an Impact Fee system for Portland. What Are Impact Fees? Impact Fees are a systematic way of having new development pay for the infrastructure demands it creates. Cities that use Impact Fees choose certain types of infrastructure they feel needs to be improved and develop a baseline and needs assessment for each of them. Costs are developed for future needs and then assigned to new development as it comes in. When sufficient funds have been collected, the improvements are made. Often there is a feedback system in place – as improvements are made, a new needs assessment is conducted and the Impact Fee system is revised accordingly. Impact fees can be a logical and fair way to address public impacts of new development. Developers are able to plug a mitigation cost into their pro forma and plan for it, rather than having to negotiate mitigation and deal with the uncertainty of that process. The City is able to devote energy into implementing these improvements, rather than into extensive negotiations with each developer based on their documented impacts. Neighbors and community groups will know what projects in their neighborhood are being funded and more confidence that they will be completed. Commonly, impact fees are collected to mitigate impacts on transportation systems; parks & open space; schools; and stormwater/sewer systems. Costs are charged on either a square foot basis or on a per unit basis. For example, Concord, NH, has an impact fee for transportation improvements that charges $2,110 per new single family home, $1,449 per multifamily unit, and $1.70 per square foot of office space. Concord also charges a per unit fee for recreational facilities and for schools.  Impact Fees Memorandum to Economic Development Committee 8/31/17 Page 2 It is critical that any impact fee system be based on solid data regarding current and future needs, as well as meeting tests established by the U.S. Supreme Court related to the fees having a rational nexus to the development (Nollan v. California Coastal Commission, 483 U.S. 825 (1987)) and have rough proportionality to the actual impact of the project (Dolan v. City of Tigard, 512 U.S. 374 (1994).) The American Planning Association has a policy guide on impact fees that provides a solid basis for thinking about their utility: “Impact Fees, when based on a comprehensive plan and used in conjunction with a sound capital improvement plan, can be an effective too for ensuring adequate infrastructure to accommodate growth where and when it is anticipated” Where Are They Used Nationally? Impact fees are used in a majority of states nationwide. A 2015 survey looked at 270 communities using impact fees as part of their development review process in 29 states and found the average impact fee for single family homes was $11,868 and the average impact fee for office development was $4,356/1000 square feet. 1 1 National Impact Fee Survey 2015, Clancy Mullen, Duncan Associates, Austin, TX  Impact Fees Memorandum to Economic Development Committee 8/31/17 Page 3 Impact fees are most common in Florida, Colorado, the southwest, and the far west. However, communities in Maine, New Hampshire and Vermont use Impact Fees. Municipalities in Massachusetts are not permitted to charge impact fees for development, except in very limited cases. Only 10 states (including Maine) have specific state legislation authorizing the use of impact fees generally. In many other states, local governments have pursued impact fees, either through home rule authority or other mechanisms. Some communities similar to Portland have well established impact fee systems, including Concord, NH; Manchester, NH; and Burlington, VT. Generally larger cities have not implemented impact fee systems, although Chicago has an impact fee system for parks and open spaces. In Oakland, California, there is a proposed impact fee system that is a useful example for Portland, in that it is comprehensive in approach and does not tie the fees to specific improvements. Their zone approach is an interesting methodology for a densely- developed city. What About in Maine? Maine’s legislature authorized the use of impact fees in 1987 as part of an overall update to the state’s planning and land use laws. Title 30-A M.R.S. §4354allows cities to pass an ordinance to require collection of impact fees for a variety of uses, including wastewater collection and treatment; solid waste facilities; fire protection; transportation; and parks and open space. While public education is not listed as an explicitly authorized purpose, it has been accepted as another authorized use for impact fees in Maine. Several communities in Maine have adopted impact fees for a variety of uses. These include: • York, where they collect impact fees for schools, water, and sewer infrastructure; • Scarborough, where they collect impact fees for specific transportation improvements and for schools; • Gorham, where they collect impact fees for water improvements; open space and recreation; and schools; and • Saco, where they collect impact fees for wastewater improvements. What Types of Impact Fees are Used? As mentioned above, impact fees are used for a variety of public infrastructure needs. The most common fees are for: • Schools • Wastewater and Stormwater  Impact Fees Memorandum to Economic Development Committee 8/31/17 Page 4 • Water Supply • Transportation Infrastructure • Parks, Recreation and Open Space • Libraries • Public Safety Fees were traditionally charged at a uniform level for each use. More recently there has been some stratification of fees. For example, some communities charge school impact fees for homes with three or more bedrooms only, or charge a lower fee for smaller units. Similarly, some impact fee systems charge less or nothing for developments utilizing existing infrastructure, such as in a traditional town center. Source: National Impact Fee Survey 2015, Clancy Mullen, Duncan Associates, Austin, TX What Current City Policies and Ordinances are Similar to Impact Fees? As part of the City’s site plan review process, and as delegated by the state to issue Traffic Movement Permits (TMP) for the Maine Department of Transportation, mitigation is currently negotiated on a case-by-case basis. Applicants submit a transportation study, stormwater analysis, and other documentation outlining their estimates of the impact of the development on City infrastructure. Sometimes these studies suggest mitigation proposals, and sometimes they find that no mitigation is required. City staff and consultants review these studies and offer a response. As part of the process, a mitigation package is approved as part of the site plan approval and TMP process.  Impact Fees Memorandum to Economic Development Committee 8/31/17 Page 5 Sometimes the mitigation involves a physical improvement, such as a new traffic light. Sometimes they involve an in-kind contribution to a future improvement. These contributions are held in discrete accounts in the City system until sufficient funds have been found to complete these improvements. These contributions have some similarity to impact fees but are not as comprehensive. As a result, the City may have half of the cost of a particular improvement in an account for some time, but does not have the funds needed to complete that improvement. The current system, particularly for TMP’s, is based on a “first past the threshold” trigger. In other words, until an intersection fails, developers are not asked to fund any improvements. Once the intersection fails, the cost of addressing that failure falls to the developer whose project created that last increment of impact. While that can both help and hurt the same development, it creates conflict and is not as fair as an impact fee system that would have been collecting funds from developers all along. There is a limited form of impact fees in effect in Portland for projects that wish to reduce their parking requirement. This voluntary fee-in-lieu-of parking system in effect on the Peninsula in certain zones. That system, created in 2010, allows developers to pay a fee rather than provide some of their parking on-site. That fee goes into the Sustainable Transportation Fund and is used to fund transportation alternatives, such as transit improvements, bike parking, and sidewalks. While this ordinance has had some successes, it is very limited in scope. Similarly, the inclusionary zoning ordinance is based on a study that connects new housing development and affordable housing needs. At present City mitigation efforts are limited to transportation, sewer and stormwater, and, very occasionally, school impacts. There is no systematic process for funding mitigation for the other categories listed above. As part of the 58 Fore Street TMP, staff negotiated a pilot impact fee system for transportation improvements. That methodology worked well, though it was isolated in that case to improvements specific to that geographic area. What is the Process to Create an Impact Fee System? While it is tempting to simply create an impact fee system and implement it, there are several important steps that must be taken to establish the public policy and legal framework for an effective program. 1. A city should first complete a Comprehensive Plan or comparable document that establishes the planning goal of an impact fee system and, as much as possible, sets city goals for infrastructure baselines. The recently approved Comprehensive Plan does much of this work, as do other studies completed in the past few years, such as the Trust for Public Land parks and open space study. 2. The City needs to determine in what areas impact fees will be pursued. Currently Portland only seeks mitigation for transportation and stormwater impacts in most cases. The more areas in which impact fees will be implemented, the more  Impact Fees Memorandum to Economic Development Committee 8/31/17 Page 6 upfront work will be needed. The cost to developers will also be higher, but greater public benefit will be provided. 3. Those infrastructure baselines need to be refined and turned into a set of public improvements that will be needed based on expected development. The City’s Capital Improvement Plan does a good job at outlining these improvements, but it is fiscally constrained based on the City’s existing financial resources and bonding capacity. A more extensive list of needs, with estimated costs attached, will need to be developed. This can be very simple, as in the case of Scarborough where they simply sought to fund a few specific roadway projects, or more complicated. Alternatively, they can be comprehensive and address a number of impacts at once, as Oakland is doing. That would be our current recommendation. 4. An impact fee study needs to be completed to link these costs and project new development. While it is tempting to skip the study phase, this study is especially important given U.S. Supreme Court rulings in Nolan and Dolan regarding establishing a rational nexus and rough proportionality for impact fee systems. 5. The City needs to approve an impact fee ordinance with a fee schedule, and amend any other ordinances that may need changing to create such a system in accordance with 30-A M.R.S. §4354. 6. Staff needs to be educated on the new system, and educate the development and neighborhood groups on it as well, to ensure that everyone is familiar with the new process. 7. Staff needs to track the various accounts and complete the funded improvements when collections are sufficient. 8. The list of projects and fee structure will need regular revisiting and updating. At a minimum, this should be completed every few years. Ideally this work would be ongoing as part of the CIP process. What are our Next Steps? With the approval of the Comprehensive Plan, the policy basis is in place for next steps. The planned rewrite of Chapter 14 into an updated Unified Development Code is compatible with replacing the current process with a more systematic impact fee system. Our next step is to complete the nexus study that will document the rationale for the amount of the Impact Fees. Staff has completed a Request for Proposals for a consultant to complete that study with the $25,000 appropriated in the FY18 budget for this purpose. Planning has been working with Public Works; Economic Development; Parks, Recreation & Facilities, and other departments to prepare for this work. We hope to have a consultant selected in September and the nexus study completed this calendar year. We will then submit a proposed ordinance for Planning Board and City Council review.  Attachment 3 MEMORANDUM PLANNING AND URBAN DEVELOPMENT DEPARTMENT PLANNING DIVISION To: Economic Development Committee From: Nell Donaldson, Senior Planner, Planning & Urban Development Department Date: June 1, 2018 Re: Impact Fee Study Update Meeting Date: June 5, 2018 I. INTRODUCTION In late 2017, on the recommendation of the city’s recently-adopted comprehensive plan, at the request of the City Manager, and with the support of the Council’s Economic Development Committee, the city’s Planning Division began an investigation into the “potential of a more robust framework for assessing development-related impacts” in the city (Portland’s Plan, 67). The purpose of this exploration, as stated in Portland’s Plan, is to “generate additional funding [for facilities and services], while also adding clarity and predictability to existing [review] procedures.” This investigation began in earnest with staff research and engagement of a consultant with national experience in impact fee design. This Economic Development Committee meeting will provide an introduction to this consultant and to the scope of work for the Impact Fee Study. 2. WHAT ARE IMPACT FEES? Impact fees are charges paid by new development to fund the cost of providing municipal facilities to serve that development. This idea is premised on the concept that when development occurs, it can bring many benefits, but it also affects the existing infrastructure around it by adding more cars, bikes, and pedestrians to the streets, increasing sewer and stormwater flows into these city systems, and infusing additional visitors into the city’s parks and open spaces, which, in turn, require additional capital investment. As a result of this thinking, impact fees are widely used throughout the United States to assess the cost of new development’s share of growth- related infrastructure needs. Impact fees have been used in some communities in the United States for the past 50+ years. 3. WHERE ARE IMPACT FEES? Although impact fees are particularly common in states that have experienced rapid population growth in the west and south, they are found in the majority of states nationwide. Concord and Figure 1: Impact fee process Manchester, NH have impact fees, as does Burlington, VT. In Maine, Economic Development Committee 6/5/18 Impact Fee Study: Introduction Table 1: Sample of Maine Communities with Impact Fees Transportation Sewer/Water Open Fire/EMS Schools Space/Recreation Brewer ⏺ ⏺ Brunswick ⏺ ⏺ Freeport ⏺ Gorham ⏺ ⏺ Lewiston ⏺ ⏺ Pownal ⏺ ⏺ Saco ⏺ ⏺ ⏺ Scarborough ⏺ ⏺ Windham ⏺ ⏺ York ⏺ ⏺ the legislature laid the foundation for impact fees with the Comprehensive Planning and Land Use Regulation Act of 1987. In the time since, communities across the state have developed and implemented impact fee ordinances (Table 1). 4. HOW ARE IMPACT FEES USED? The uses of impact fees vary widely, depending on state enabling legislation, but in all cases impact fees may only be used to construct, expand, or replace infrastructure required to serve new development. Many communities use impact fees to address growth-related capital costs associated with roads, parks, water, and sewer infrastructure. Fire and police-related impact fees are also fairly common, as are school impact fees. In Maine, impact fees may be used for transportation projects, public safety facilities, sewer and water systems, parks and open space, and school improvements. Impact fees may not be used to pay for operations or maintenance, and may not be used to address existing deficiencies in these systems. 5. HOW MUCH ARE IMPACT FEES? Regardless of where impact fees are used, courts have established that there must be a rational nexus and rough proportionality between the type and scale of development and the fee imposed. Per guidance from the former Maine State Planning Office, “the expansion of the facility and/or service must be necessary and must be caused by the development; the fees charged must be based on the costs of the new facility/service apportioned to the new development; and the fees must benefit those who pay” (Maine State Planning Office, 4). Given these standards, in order for impact fees to be charged, a community must conduct an analysis that identifies growth-related infrastructure costs and apportions those costs to projected development, often by development type, on a square foot, unit, or per trip basis. The resulting fees must be established through a council-adopted ordinance that meets a series of state requirements around the provision of language to address the relationship between fees and growth’s share of infrastructure costs, the treatment of revenues generated from impact fees, timely use of impact fees, and refunds (Title 30-A MRSA §4354). As a product of the great variation in communities that have adopted impact fees, and the great variation in uses of impact fees, the amount of impact fees varies widely from state to state and community to community. A 2015 study of impact fees across the country by Duncan Associates, a national firm specializing in impact fee work, found that state-wide average non-utility (i.e. excluding water and wastewater) impact fees for single-family residential projects ranged from less than $1,000 in Arkansas to almost $25,000 in California (Duncan Associates). In New Hampshire, the study found total residential fees ranging from approximately $3,000 for a 3-br single-family home in Manchester to $5,000 in Concord. In Burlington, the study estimated a $5,000 fee for a 3-br single-family home. The same study found that fees across the country averaged approximately $6,000 per KSF for retail uses, approximately $4,000 per KSF for office uses, and approximately $3,000 per KSF for industrial uses. 2 Economic Development Committee 6/5/18 Impact Fee Study: Introduction 6. HOW DOES THIS RELATE TO PORTLAND’S CURRENT ORDINANCE? The City of Portland’s existing site plan ordinance allows the city to require mitigation “so as to be consistent with City Council approved master plans and facilities plans and with off-premises infrastructure, including but not limited to sewer and stormwater, streets, trails, pedestrian and bicycle network, environmental management or other public facilities” (City of Portland Land Use Code 14-526(c)1.a). Further, the city’s Technical Manual requires that developments that generate more than 100 passenger car equivalents obtain a Traffic Movement Permit (TMP) under the city’s delegated review authority. The issuance of a TMP includes a “summary of findings and recommendations for improvements and other impact mitigation measures” (City of Portland Technical Manual, 2). Under these regulations, the city negotiates mitigation on a case-by-case basis predicated on an analysis of impacts identified through the site plan or subdivision review process. As a product of this process, in some cases, developers make in-kind physical improvements, upgrading a traffic light or installing pedestrian signalheads and ramps at a nearby intersection. In other cases, developers are required to make financial infrastructure contributions proportionate to their impacts. These contributions are held in separate “infrastructure accounts” until they can be drawn down to pay for the improvement identified through the review process. Because this process is conducted on a case-by-case basis, it is neither as systematic or predictable as many would prefer. Further, the system often penalizes the “last one in,” whose development causes an intersection level of service to fail, rather than addressing the incremental impact of all prior developments. An impact fee framework for the City of Portland would establish a more predictable, transparent, and equitable way of assessing the impact of incremental growth on public facilities and services. An impact fee system would also provide the city with some measure of efficiency. 7. IMPACT FEE STUDY SCOPE & SCHEDULE In mid-2017, the City Council adopted Portland's Plan 2030, a new comprehensive plan designed to guide the city’s growth and change over the next ten years. Among the plan’s recommendations is a strong commitment to exploring new ways of funding our critical facilities and services, particularly as they are used by a growing number of residents, workers, and visitors. The plan anticipates future population and employment growth in the city and suggests an exploration of impact fees as a means of assessing capital costs associated with that growth. In August 2017, the Economic Development Committee met to review the impact fee concept (Attachment 1). With the support of the committee, and working with the Departments of Public Works and the Parks, Recreation, and Facilities, Department of Planning & Urban Development staff released an RFP for an Impact Fee Study in October of 2017. The purpose of the study, as written in the RFP, is to develop impact fee systems for multi-modal transportation infrastructure, parks and open space, and wastewater infrastructure. In January 2018, the Planning & Urban Development Department, with the assistance of DPW and the Department of Parks, Recreation, and Facilities, hired TischlerBise, a consulting firm with national experience in impact fee design, to complete the Impact Fee Study. The study’s first step is to compile the data, including population and employment growth projections, that will serve as the foundation for the impact fee analysis. In late April, Tischler developed a final draft memo summarizing demographic and development assumptions for the study (Attachment 2). This memo was based on data provided by the Department of Planning & Urban Development, the Department of Public Works, and the Department of Parks, Recreation, and Facilities, and includes discussion of population, development, employment, traffic, and wastewater usage trends in the city. 3 Economic Development Committee 6/5/18 Impact Fee Study: Introduction Figure 2: Impact Fee Study timeline The next phase of the study will determine capital facility needs and desired service levels for each of the three fee types under consideration. The study will explore various standard methodologies for deriving fees on a per unit, per trip, or per square foot basis and identify the most appropriate methodology for each fee type. The last step of the study will analyze projected funding and cash flow to understand the likely revenue stream and capital expenditures associated with the fees. Draft and final impact fee reports, including potential impact fee schedules, will be prepared. Ultimately, a draft impact fee ordinance, including fee structures based on these reports, will be presented to the Planning Board and City Council. 8. PUBLIC INVOLVEMENT Throughout the process, the Impact Fee Study will include a public involvement component designed to engage key stakeholders at major points in the process: A. Stakeholder Group – In mid-May, staff gathered an informal group of stakeholders for an introduction to the Impact Fee Study. This informal stakeholder group is meant to include a range of community members with a stake in the outcome of the study – from developers to neighborhood association representatives to those with a broad interest in economic development in the city. The purpose of the group is to provide feedback on major work products over the course of the study. At the May meeting, Tischler gave an overview of the study and the demographic and land use assumptions that will underpin the analysis in future phases. Subsequent workshops will address capital needs, fee calculation methodologies, and potential fees. B. Planning Board – Also in mid-May, the Planning Board met for the first of several workshops on the Impact Fee Study. This workshop, like the first stakeholder group meeting, focused on providing an overview of the study and presenting early demographic and land use assumptions. Subsequent workshops will address capital needs, fee calculation methodologies, and potential fees. Ultimately, the Planning Board will be responsible for reviewing not only the technical elements of the Impact Fee Study, but also reviewing ordinance language for potential adoption by the City Council. C. Economic Development Committee – Updates will be provided to the EDC at important study milestones. D. City Council – For impact fees to be implemented, the Council would need to adopt ordinance language, including a set of fees as generated by the Impact Fee Study. E. Other - A project website has also been developed (https://www.recodeportland.me/impact-fee-study/). This website will be updated over the course of the Impact Fee Study. Early engagement with both the stakeholder group and with the Planning Board has yielded important feedback, focused primarily on large questions around the city’s existing capital funding mechanisms and the economic implications of impact fees. Questions arising from these early meetings included: A. How would impact fees fit within the city's existing framework for funding capital projects? − How do we fund capital improvements for each of the three impact fee categories now? − What is our financial exposure with a plan-based approach to impact fees (i.e. the way we're thinking about transportation and wastewater projects), and do we have a funding strategy for filling any gaps? − What is our broader strategy for filling capital funding gaps in the city? − What happens if growth slows or we enter a recession? 4 Economic Development Committee 6/5/18 Impact Fee Study: Introduction − Can we quantify how development is/isn't 'paying for itself' with tax revenue right now? (and related, if developers are paying taxes, isn't this double-dipping?) What about the revaluation? B. How would impact fees compare to our current system of collecting mitigation? − Will it really replace the existing system? − Will it cost developers more out-of-pocket? − How much time and money will it cost the city to administer? Do we have the capacity for this? − How will revenues compare to what we're generating in mitigation right now? C. How will this affect the economy, housing choice, etc. down the line? − Who actually bears the cost of impact fees? − Will an impact fee have a negative impact on housing affordability? − Will an impact fee have a negative effect on the pace of growth and the city's economy more broadly? Continued discussion on these topics is expected at the next round of meetings on the study. 9. NEXT STEPS 1. Staff and the consultant to continue work on the needs analysis phase of the study; 2. Staff to schedule a second round of meetings with the Planning Board and stakeholder group to review work products and, ultimately, a draft impact fee ordinance. 10. ATTACHMENTS 1. Memo to the Economic Development Committee, Jeff Levine, Director, Planning & Urban Development, 8/31/17 (Not included in attachments for 9/13/18 memo.) 2. Draft Demographic Data and Development Projections for Impact Fee Study, Tischler Bise, 4/23/18 (Not included in attachments for 9/13/18 memo.) 5  Attachment 4 MEMORANDUM PLANNING AND URBAN DEVELOPMENT DEPARTMENT PLANNING DIVISION To: Economic Development Committee From: Nell Donaldson, Senior Planner, Department of Planning & Urban Development Date: September 13, 2018 Re: Impact Fee Study Update Meeting Date: September 18, 2018 I. INTRODUCTION Earlier this year, the city’s Planning Division, with the assistance of the Department of Public Works and the Department of Parks, Recreation, and Facilities, began the process of developing an impact fee study for the city. The intent of the study is to explore the potential for three municipal impact fees, for parks and recreation facilities, transportation, and wastewater, as a means of establishing a predictable, transparent, and equitable system for mitigating the impacts of development as it occurs in Portland over the next 10 years. Planning Division staff met with the Economic Development Committee to introduce the Impact Fee Study in June of this year. That meeting included an overview of impact fees, a discussion on the ways that the city currently addresses mitigation of development impacts, and a brief synopsis of the scope of work for the study (Attachment 2). The purpose of this second EDC meeting is to provide an update on the study, present a set of preliminary maximum defensible fee calculations, share draft ordinance language, and gather committee feedback prior to presenting to the full Council in a workshop scheduled for September 24. 2. BACKGROUND ON IMPACT FEES A. What are impact fees? Impact fees are charges paid by new development to fund the cost of providing municipal facilities to serve that development. This idea is premised on the concept that when development occurs, it can bring many benefits, but it also affects the existing infrastructure around it by adding more cars, bikes, and pedestrians to the streets, increasing sewer and stormwater flows into city systems, and infusing additional visitors into the city’s parks and open spaces. In turn, these facilities require additional capital investment. As a result of this thinking, impact fees are widely used throughout the United States. Impact fees have been used in some communities in the United States for the past 50+ years. Figure 1: Impact fee process Economic Development Committee 9/18/18 Impact Fee Study: Update Table 1: Sample of Maine Communities with Impact Fees Transportation Sewer/Water Open Fire/EMS Schools Space/Recreation Brewer ⏺ ⏺ Brunswick ⏺ ⏺ Freeport ⏺ Gorham ⏺ ⏺ Lewiston ⏺ ⏺ Pownal ⏺ ⏺ Saco ⏺ ⏺ ⏺ Scarborough ⏺ ⏺ Windham ⏺ ⏺ York ⏺ ⏺ B. Where are impact fees? Although impact fees are particularly common in U.S. states that have experienced rapid population growth in the west and south, they are found in the majority of states nationwide. Concord and Manchester, NH have impact fees, as does Burlington, VT. In Maine, the legislature laid the foundation for impact fees with the Comprehensive Planning and Land Use Regulation Act of 1987. In the time since, communities across the state, mostly in southern Maine, have developed and implemented impact fee ordinances (Table 1). C. How may impact fees be used? The uses of impact fees vary widely, depending on state enabling legislation, but in all cases impact fees may only be used on capital projects to construct, expand, or replace infrastructure required to serve new development. In Maine, impact fees may be used for transportation projects, public safety facilities, sewer and water systems, parks and open space, and school improvements. Impact fees may not be used to pay for operations or maintenance, and may not be used to address existing deficiencies in these systems. 3. MAXIMUM DEFENSIBLE FEE CALCULATIONS Regardless of where impact fees are used, courts have established that there must be a rational nexus and rough proportionality between the type and scale of development and the fee imposed. Per guidance from the former Maine State Planning Office, “the expansion of the facility and/or service must be necessary and must be caused by the development; the fees charged must be based on the costs of the new facility/service apportioned to the new development; and the fees must benefit those who pay” (Maine State Planning Office, 4). Given these standards, in order for impact fees to be charged, a community must conduct an analysis that identifies growth-related infrastructure costs and apportions those costs to projected development, often by development type, on a square foot, unit, or per trip basis. The City of Portland’s Impact Fee Study is meant to provide such an analysis. To date, the study has included the following work: A. Development of population, employment, and land use assumptions. The first step of the study involved the development of 10-year growth projections (i.e. the projected change in population, employees, trips, and wastewater flows for which impacts could potentially be assessed)(Attachment 3). This step included the collection of background data on population, employment, land use, and wastewater flows in the city, a review of trends, and a survey of data from other sources (e.g. estimates from GPCOG, PACTS). 2 Economic Development Committee 9/18/18 Impact Fee Study: Update B. Determination of capital facility needs and current levels of service. The second step of the study involved the collection of data necessary to identify capital costs associated with projected growth: • The Department of Parks, Recreation, and Facilities provided an inventory of current parks and recreation facilities and identified replacement costs for each. This inventory was used to calculate existing level of service for parks and recreation facilities on a per capita and per job basis. • The Department of Public Works generated capital transportation and wastewater project lists based on recent Capital Improvement Plan (CIP) requests. Given the volume of the transportation projects, projects were subsequently categorized as high-, medium-, and low-readiness. DPW staff then determined the proportion of these capital projects, if any, attributable to future growth, based on project location and project type. C. Development of maximum defensible fee calculations. In the third step of the study, different commonly- used impact fee methodologies were reviewed for suitability with respect to the three impact fee categories under consideration. Subsequently, maximum defensible fee calculations were developed: • The existing parks and recreation inventory, replacement cost figures, and growth factors from the demographic analysis were combined to calculate maximum defensible parks fees for residential and non-residential land uses. This fee is based on an incremental expansion model, which is premised on the concept that, as growth occurs, it pays to maintain existing levels of service for parks and recreation facilities. • Transportation fees were calculated using a plan-based approach. The share of high-readiness capital projects that could be attributed to growth was allocated across projected increases in person trips associated with population and employment projections, resulting in maximum defensible transportation fees for both residential and non-residential land uses. • Likewise, for the wastewater fee calculations, a plan-based approach was used. Again, the share of capital project costs that could be attributed to growth was apportioned over projected increases in wastewater flows, resulting in maximum defensible wastewater fee calculations based on meter size. D. Stakeholder outreach. In late July, these initial maximum supportable fee calculations were shared with the study’s stakeholder group, consisting of neighborhood representatives, developers, and representatives of organizations with a stake in economic development in the community more broadly. This group reviewed the calculations and provided valuable feedback on methodology, assumptions, and the level of the maximum defensible fee calculations. E. Revisions to maximum defensible fee calculations. In response to these comments, DPW, Parks and Recreation, and Planning staff met to discuss ways in which to respond to comments and modify assumptions to develop a revised set of fees. As a product of these discussions, several changes were made to the assumptions, including: • Adding additional non-residential uses to the parks fee • Eliminating parks vehicles and recreation facilities for which the city is unlikely to expand capacity in the future • Modifying assumptions regarding future MaineDOT/federal funding • Modifying city/growth shares for some transportation capital projects • Broadening land use categories on the transportation fee • Modifying the wastewater fee to include a credit for future stormwater and wastewater fees that will cover existing debt service The resulting fee calculations are those presented here (Attachment 4). These revised fee calculations are significantly lower than the calculations prepared in the early summer and originally presented to the 3 Economic Development Committee 9/18/18 Impact Fee Study: Update stakeholder group. This means that the fees will not go as far as those initially calculated in terms of covering growth-related infrastructure costs in the city. As a result, the City will need to look to the General Fund and other sources to cover a larger portion of these costs. F. Analysis of maximum defensible fee calculations. In addition to gathering feedback on the revised maximum supportable fee calculations from this committee, the Planning Board, and the full City Council over the coming week, staff has shared the revised fee calculations with the stakeholder group and offered to meet with members of the group to review and discuss. Staff has also engaged a third party to assess the potential impact of the fee calculations on various development types. Last, the impact fee consultant has begun an analysis to examine the effect of the maximum supportable fee calculations on housing affordability within the city. 4. DRAFT ORDINANCE In order to collect impact fees, municipalities must have enacted a council-adopted ordinance that meets a series of requirements established by state statute. These requirements include the provision of language to address the relationship between fees and growth’s share of infrastructure costs, the treatment of revenues generated from impact fees, timely use of impact fees, and refunds (Title 30-A MRSA §4354). Staff has used the state statute, impact fee ordinances from communities in Maine and nationwide, and guidance from the former State Planning Office to develop draft ordinance language to accompany the fee calculations (Attachment 5). This ordinance language addresses not only the technical requirements of the statute but issues critical to the administration of impact fees: A. Applicability. The draft ordinance is written such that any development on a site that generates an increase in impact would be subject to impact fees. This would include new development, additions to existing buildings which result in net new residential units, non-residential square footage, or wastewater meters, and changes of use which result in a net increase in impact per the impact fee schedule. B. Impact fee schedule and basic guidelines for the calculation of the fee. The draft ordinance includes language designed to clarify methods for calculating fees for mixed-use development, redevelopment, additions, and changes of use. C. Provisions for the modification of the fee amount. The draft ordinance has been written to allow the Planning Board, based on a property-owner’s application, to grant a credit against required impact fees for any infrastructure improvements made by a developer which are part of or equivalent to the projects for which impact fees are being collected. Likewise, the draft ordinance includes language allowing the Planning Board to modify or waive impact fees for developers that can prove that a proposed use will have no or significantly-diminished demands on the capital facilities for which impact fees are being collected. D. Waivers for affordable housing. The draft ordinance includes a reference to Division 30, which provides for fee reductions for affordable housing developments. Under the draft ordinance, the existing fee reductions granted in Division 30 would apply to impact fees. E. Administration of funds. Lastly, the draft ordinance language also addresses the timing of impact fee collection, accounting procedures, and procedure for refunds as necessary. The draft ordinance has been reviewed by Corporation Counsel. It is anticipated that Corporation Counsel will continue to review as future revised drafts are developed. Simultaneously, staff has begun discussions with Finance and Inspections on how fees would be collected and administered. 5. COMPARISON WITH THE CURRENT SYSTEM At previous meetings on the Impact Fee Study, questions have been raised about the city’s current system for collecting mitigation for projects that have impacts on municipal infrastructure. The City of Portland’s existing site plan ordinance allows the city to require mitigation “so as to be consistent with City Council approved master plans and facilities plans and with off-premises infrastructure, including but not limited to sewer and stormwater, streets, 4 Economic Development Committee 9/18/18 Impact Fee Study: Update trails, pedestrian and bicycle network, environmental management or other public facilities” (City of Portland Land Use Code 14-526(c)1.a). Further, the city’s Technical Manual requires that developments that generate more than 100 passenger car equivalents obtain a Traffic Movement Permit (TMP) under the city’s delegated review authority. The issuance of a TMP includes a “summary of findings and recommendations for improvements and other impact mitigation measures” (City of Portland Technical Manual, 2). Under these regulations, the city negotiates mitigation on a case-by-case basis predicated on an analysis of impacts identified through the site plan or subdivision review process. As a product of this process, in some cases, developers make in-kind physical improvements, upgrading a traffic light or installing pedestrian signalheads and ramps at a nearby intersection. In other cases, developers are required to make financial infrastructure contributions proportionate to their impacts. These contributions are held in separate “infrastructure accounts” until they can be drawn down to pay for the improvement identified through the review process. For reference, data shows that, as mitigation of impacts for site plans approved between May of 2013 and May of 2018, the Planning Board and/or the Planning Authority required infrastructure contributions totaling just over $1 million. It should be noted that this figure does not include in-kind work completed by developers and some substantial contributions yet to come, including that from the Portland Company redevelopment. The majority of infrastructure contributions collected as mitigation during that timeframe were for traffic improvements. Our current system for collecting mitigation has some significant weaknesses: • It involves a negotiated process that creates uncertainty for developers, neighbors, and the City. This negotiation process takes additional time, and also involves expending costs that could otherwise be put directly into mitigation. • The staff audit of infrastructure contributions over the past five years indicates that the City is not adequately planning for growth. Projects are generally not fully mitigating their impacts and allowing the City’s plan for growth to be implemented in a timely fashion. As a result, the backlog of needed infrastructure projects increases without a financial plan to adequately fund the work. 6. NEXT STEPS 1. Presentation to Planning Board at workshop on 9/20/18; 2. Presentation to City Council at workshop on 9/24/18; 3. Completion of analysis and revisions to fee calculations and draft ordinance as necessary; 4. Planning Board and Council hearings 7. ATTACHMENTS 1. Memo to the Economic Development Committee, Jeff Levine, Director, Planning & Urban Development Department, 8/31/17 2. Memo to the Economic Development Committee, Nell Donaldson, Planning & Urban Development Department (without attachments), 6/5/18 3. Demographic Data and Development Projections for Impact Fee Study, Tischler Bise, 6/5/18 4. Revised Preliminary Maximum Defensible Fee Calculations, TischlerBise, 9/12/18 5. Draft Impact Fee Ordinance, 9/13/18 5 Impact Fee Study Overview Attachment 5 REVISED PRELIMINARY MAXIMUM DEFENSIBLE FEE CALCULATIONS City of Portland, ME September 24, 2018  City of Portland Impact Fee Study o Impact Fee Fundamentals o Changes Made Based on Comments of 1st Draft Fees o Parks & Recreation o Transportation o Wastewater TischlerBise | www.tischlerbise.com 2  Impact Fee Fundamentals o One-time payment for growth-related infrastructure, usually collected at the time buildings permits are issued o Can’t be used for operations, maintenance, or replacement o Not a tax but more like a contractual arrangement to build infrastructure, with three requirements: o Need (system improvements, not project-level improvements) o Benefit oShort range expenditures oGeographic service areas and/or benefit districts o Proportionate o Compared to negotiated agreements, streamlines approval process with known costs (predictability) TischlerBise | www.tischlerbise.com 3  Impact Fee Fundamentals o In Maine, authorized under the Comprehensive Planning and Land Use Regulation Act of 1987, Title 30-A MRSA, Section 4354 Brewer Lewiston Pownal Gorham Windham Brunswick Scarborough Freeport Berwick Saco York TischlerBise | www.tischlerbise.com 4  Changes Since 1st Draft o Parks & Recreation o Incremental expansion methodology has been expanded to include nonresidential demand on facilities. o Workers use Parks & Recreation facilities during breaks and lunch. o The vehicle component was removed. o Adjusted facilities included in the level of service calculations. Parks & Rec Parks & Rec Increase/ Development Type 1st Draft Revised Draft Decrease Residential (per housing unit) Single Family/Duplex $2,442 $1,126 ($1,316) Multifamily $1,631 $752 ($879) Nonresidential (per 1,000 square feet) Retail & Service - $534 $534 Office - $677 $677 Industrial - $363 $363 Institutional - $645 $645 Accommodation (per hotel room) Hotel $1,898 $875 ($1,023) TischlerBise | www.tischlerbise.com 5  Changes Since 1st Draft o Transportation o Revised methodology to include five nonresidential land use categories. o Adjusted multimodal projects included in the plan-based methodology. Transportation Transportation Increase/ Development Type 1st Draft Revised Draft Decrease Residential (per housing unit) Single Family/Duplex $3,698 $2,159 ($1,539) Multifamily $1,752 $1,023 ($729) Nonresidential (per 1,000 square feet) Hospital $5,280 - - Congregated Care/Assisted Living $2,065 - - School $9,615 - - Place of Assembly $3,422 - - Retail & Personal Services $14,132 - - Recreational $14,197 - - Office $4,797 - - Industrial $2,443 - - Industrial Transportation $691 - - Retail & Service - $8,248 - Office - $2,800 - Industrial - $1,130 - Institutional - $3,082 - Accommodation (per hotel room) Hotel $4,118 $2,404 ($1,714) TischlerBise | www.tischlerbise.com 6  Changes Since 1st Draft o Wastewater o Included additional projects into future debt payments, increasing the Debt Service Credit. Meter Size Wastewater Wastewater Increase/ (inches) 1st Draft Revised Draft Decrease All Development (per meter) 5/8 $2,069 $1,886 ($183) 3/4 $3,104 $2,829 ($275) 1 $5,173 $4,715 ($458) 1.5 $10,345 $9,430 ($915) 2 $16,552 $15,088 ($1,464) 3 $33,104 $30,176 ($2,928) 6 $103,450 $94,300 ($9,150) 8 $165,520 $150,880 ($14,640) TischlerBise | www.tischlerbise.com 7  Parks & Rec Impact Fee Analysis o Consumption-Based/Incremental Expansion Methodology PARKS & RECREATION IMPACT FEE Residential & Nonresidential Development Persons per Household/Hotel Room Multiplied By Net Capital Cost per or Jobs per 1,000 Square Feet Person/Job Parks Cost per Person/Job Single-track Trails Cost per Person/Job Recreational Facilities Cost per Person/Job Credit for Future Debt Payment per Person/Job TischlerBise | www.tischlerbise.com 8  Parks & Rec Impact Fee Analysis o Park Component – Existing Level of Service & Cost per Demand Unit Basketball Community Dog Park Base/Softball Pickleball Acres Athletic Field Baseball Field Courts Gardens Area Fields Courts City of Portland Total 316.3 5.0 11.0 10.0 8.0 2.0 2.0 4.0 Average Replacement Cost $59,172 $350,000 $175,000 $45,000 $30,000 $50,000 $175,000 $45,000 Replacement Cost Subtotal $18,716,104 $1,750,000 $1,925,000 $450,000 $240,000 $100,000 $350,000 $180,000 Volleyball Picnic Tables Playgrounds Pools Skate Park Softball Fields Splashpads Tennis Courts Courts City of Portland Total 22.0 18.0 1.0 1.0 4.0 5.0 15.0 2.0 Average Replacement Cost $750 $175,000 $2,000,000 $350,000 $175,000 $30,000 $45,000 $45,000 Replacement Cost Subtotal $16,500 $3,150,000 $2,000,000 $350,000 $700,000 $150,000 $675,000 $90,000 Land Replacement Cost $18,716,104 Total Park Acres 316.3 Improvement Replacement Cost $12,126,500 Total Replacement Cost $30,842,604 Total Replacement Cost $30,842,604 Replacement Cost per Park Acre $97,511 Source: City of Portland Parks and Recreation; Assessor's Office Residential Level-of-Service (LOS) Standard Nonresidential Level-of-Service (LOS) Standard Share of Impact Days 72% Share of Impact Days 28% Share of Impact Days calculation Share of Park Acres 227.7 Share of Park Acres 88.6 found in Appendix. 2018 Peak Population 83,250 2018 Jobs 67,270 LOS: Acre per 1,000 Persons 2.74 LOS: Acre per 1,000 Jobs 1.32 Cost Analysis Cost Analysis Replacement Cost per Acre $97,511 Replacement Cost per Acre $97,511 LOS: Acre per 1,000 Persons 2.74 LOS: Acre per 1,000 Jobs 1.32 Replacement Cost Per Capita $267 Replacement Cost Per Job $129 TischlerBise | www.tischlerbise.com 9  Parks & Rec Impact Fee Analysis o Single-Track Trail Component – Existing Level of Service & Cost per Demand Unit Single-Track Trail Trail (miles) Citywide Passive Trails 36.2 Total 36.2 Source: Ci ty of Portl a nd Pa rks a nd Recrea ti on Residential Level-of-Service (LOS) Standard Nonresidential Level-of-Service (LOS) Standard Share of Impact Days 72% Share of Impact Days 28% Share of Trail Miles 26.1 Share of Trail Miles 10.1 2018 Peak Population 83,250 2018 Jobs 67,270 LOS: Miles per 1,000 Persons 0.31 LOS: Miles per 1,000 Jobs 0.15 Cost Analysis Cost Analysis Costs per mile $15,000 Costs per mile $15,000 LOS: Miles per 1,000 Persons 0.31 LOS: Miles per 1,000 Jobs 0.15 Replacement Cost per Person $5 Replacement Cost per Job $2 TischlerBise | www.tischlerbise.com 10  Parks & Rec Impact Fee Analysis o Recreational Facility Component – Existing Level of Service & Cost per Demand Unit Square Replacement Recreational Facilities Feet Cost East End Community Center 23,500 $5,875,000 Peaks Island Community Center 2,000 $550,000 Portland Ice Arena 29,273 $3,125,896 Reiche Community Center 25,000 $8,750,000 Riverton Community Center 31,500 $11,970,000 Total 111,273 $30,270,896 Source: Ci ty of Portl a nd Pa rks a nd Recrea ti on Residential Level-of-Service (LOS) Standard Nonresidential Level-of-Service (LOS) Standard Share of Impact Days 72% Share of Impact Days 28% Share of Rec. Square Feet 80,117 Share of Rec. Square Feet 31,156 2018 Peak Population 83,250 2018 Jobs 67,270 LOS: Square Feet per Person 0.96 LOS: Miles per 1,000 Jobs 0.46 Cost Analysis Cost Analysis Costs per Square Foot $272 Costs per Square Foot $272 LOS: Square Feet per Person 0.96 LOS: Miles per 1,000 Jobs 0.46 Replacement Cost per Person $261 Replacement Cost per Job $125 TischlerBise | www.tischlerbise.com 11  Parks & Rec Impact Fee Analysis o Credit for Future Debt Payment Component o To avoid future growth double paying for Parks & Rec facilities, a credit is necessary for future debt payments. Residential Credit Nonresidential Credit ProjectedPayment/ Projected Payment/ Fiscal Year Payment Fiscal Year Payment Population Capita Jobs Job Base Year $617,060 83,250 $7.41 Base Year $239,968 67,270 $3.57 2019 $715,720 83,678 $8.55 2019 $278,336 67,959 $4.10 2020 $676,719 84,106 $8.05 2020 $263,169 68,648 $3.83 2021 $628,339 84,534 $7.43 2021 $244,354 69,337 $3.52 2022 $606,452 84,962 $7.14 2022 $235,842 70,026 $3.37 2023 $554,947 85,390 $6.50 2023 $215,813 70,715 $3.05 2024 $478,117 85,818 $5.57 2024 $185,935 71,404 $2.60 2025 $461,771 86,246 $5.35 2025 $179,578 72,093 $2.49 2026 $434,672 86,673 $5.02 2026 $169,039 72,782 $2.32 2027 $386,672 87,101 $4.44 2027 $150,372 73,471 $2.05 2028 $364,280 87,529 $4.16 2028 $141,665 74,160 $1.91 Total $5,924,749 $69.62 Total $2,304,071 $32.81 Discount Rate 3.00% Discount Rate 3.00% Total Credit $60 Total Credit $28 Source: Ci ty of Portl a nd Fi na nce Depa rtment Source: Ci ty of Portl a nd Fi na nce Depa rtment TischlerBise | www.tischlerbise.com 12  Parks & Rec Impact Fee Analysis o Maximum Defensible Fee Fee Cost Cost Component per Person per Job Parks $267 $129 Single-Track Trails $5 $2 Rec. Facilities $261 $125 Debt Service Credit ($60) ($28) TOTAL $473 $228 Residential (per housing unit) Persons per Maximum Type of Unit Household Defensible Fee Single Family/Duplex 2.38 $1,126 Multifamily 1.59 $752 Nonresidential (per 1,000 square feet) Jobs per 1,000 Maximum Type of Unit Square Feet Defensible Fee Retail & Service 2.34 $534 Office 2.97 $677 Industrial 1.59 $363 Institutional 2.83 $645 Nonresidential (per room) Persons per Maximum Type of Unit Room Defensible Fee Hotel 1.85 $875 TischlerBise | www.tischlerbise.com 13  Parks & Rec Impact Fee Analysis o Parks & Recreation Fee Revenue Total Cost to Cost Attributable Maintain LOS to Growth Parks $1,950,220 $1,950,220 Single-Track Trails $34,500 $34,500 Rec Facilities $1,979,344 $1,979,344 Total Expenditures $3,964,064 $3,964,064 Projected Development Impact Fee Revenue Capital Cost Capital Cost per Person per Job $473 $228 Year Population Jobs Base 2018 83,250 67,270 Year 1 2019 83,678 67,959 Year 2 2020 84,106 68,648 Year 3 2021 84,534 69,337 Year 4 2022 84,962 70,026 Year 5 2023 85,390 70,715 Year 6 2024 85,818 71,404 Year 7 2025 86,246 72,093 Year 8 2026 86,673 72,782 Year 9 2027 87,101 73,471 Year 10 2028 87,529 74,160 Ten-Year Increase 4,279 6,890 Projected Revenue => $2,023,810 $1,570,948 Projected Revenue => $3,594,757 Total Expenditures => $3,964,064 General Fund's Share => $369,307 TischlerBise | www.tischlerbise.com 14 Transportation Impact Fee Analysis o Plan-Based Methodology – Person Trips TRANSPORTATION IMPACT FEE Residential & Nonresidential Development Average Weekday Person Trip Ends by Land Use Multiplied by Adjustment Factors Multiplied by Capital Cost Per Person Trip Plan-Based Capital Cost Capacity Improvements to Multimodal Facilities Capacity Improvements to Signals Credit for Future Debt Payment TischlerBise | www.tischlerbise.com 15 Transportation Impact Fee Analysis o Multimodal Component – High Readiness Projects Length of Project Growth's Project Readiness (linear feet) Total City Cost Share Growth's Cost W. Commercial Street Path High 5,000 $750,000 50% $375,000 Thames Street High 1,200 $1,450,000 25% $362,500 Franklin Street: I-295 to Somerset High 700 $4,050,000 75% $3,037,500 Congress Square Intersection Construction High 650 $1,300,000 25% $325,000 Marginal Way: Hanover to Plowman High 5,600 $1,000,000 25% $250,000 Kennebec Street Realignment at Forest Avenue High 450 $500,000 50% $250,000 Somerset Street High 1,800 $1,500,000 50% $750,000 Forest Avenue (Morrill's Corner Intersections) High 1,600 $2,280,000 50% $1,140,000 Brighton Avenue High 13,000 $1,100,000 25% $275,000 Washington Avenue Rehabilitation High 1,500 $2,000,000 25% $500,000 TOTAL 31,500 $15,930,000 $7,265,000 Growth's Cost of Transportation Projects $7,265,000 10-Year Increase in Average Daily Person Trips 47,721 Capital Cost per Trip $152 TischlerBise | www.tischlerbise.com 16 Transportation Impact Fee Analysis o Signal Component – High Readiness Projects Project Readiness Total Cost Growth's Share Growth's Cost Modernize Signal Systems High $9,375,000 75% $7,031,250 Arterial Street Crossings High $2,000,000 50% $1,000,000 TOTAL $11,375,000 $8,031,250 Growth's Cost of Transportation Projects $8,031,250 10-Year Increase in Average Daily Person Trips 47,721 Capital Cost per Trip $168 TischlerBise | www.tischlerbise.com 17 Transportation Impact Fee Analysis o Credit for Future Debt Payment Component o To avoid future growth double paying for Transportation facilities, a credit is necessary for future debt payments. Projected Payment/ Fiscal Year Payment Ave. Daily Person Trip Person Trips Base Year $3,751,763 735,171 $5.10 2019 $4,314,139 739,943 $5.83 2020 $4,060,134 744,715 $5.45 2021 $3,772,123 749,487 $5.03 2022 $3,633,359 754,260 $4.82 2023 $3,323,658 759,032 $4.38 2024 $2,916,044 763,804 $3.82 2025 $2,815,726 768,576 $3.66 2026 $2,591,944 773,348 $3.35 2027 $2,374,976 778,120 $3.05 2028 $2,147,023 782,892 $2.74 Total $35,700,889 $47.24 Discount Rate 3.00% Total Credit $41.00 TischlerBise | www.tischlerbise.com 18 Transportation Impact Fee Analysis o Maximum Defensible Fee – High Readiness only Input Variables Cost per Trip for Multimodal Projects => $152 Cost per Trip for Signals => $168 Debt Service Credit per Trip => ($41) Capital Cost per Person Trip $279 Avg Wkdy Person Trip Rate Maximum Development Type Trip Ends Adjustment Defensible Fee Residential (per housing unit) Single Family/Duplex 13.34 58% $2,159 Multifamily 6.32 58% $1,023 Nonresidential (per 1,000 square feet of floor area) Retail & Service 77.80 38% $8,248 Office 20.07 50% $2,800 Industrial 8.10 50% $1,130 Institutional 22.09 50% $3,082 Nonresidential (per room) Hotel/Motel 17.23 50% $2,404 TischlerBise | www.tischlerbise.com 19 Transportation Impact Fee Analysis o Transportation Impact Fee Revenue Cost Attributable Total Cost to Growth Multimodal Projects $15,930,000 $7,265,000 Signals $11,375,000 $8,031,250 Total Expenditures $27,305,000 $15,296,250 Projected Transportation Impact Fee Revenue Retail & Single Family Multifamily Service Office Industrial Institutional Year Housing Units Housing Units 1,000 Sq. Ft. 1,000 Sq. Ft. 1,000 Sq. Ft. 1,000 Sq. Ft. Base 2018 21,047 16,575 9,817 9,318 7,225 8,909 Year 1 2019 21,080 16,829 9,874 9,403 7,289 8,980 Year 2 2020 21,113 17,083 9,931 9,489 7,353 9,050 Year 3 2021 21,147 17,336 9,988 9,574 7,418 9,121 Year 4 2022 21,180 17,590 10,045 9,660 7,482 9,191 Year 5 2023 21,213 17,844 10,102 9,745 7,546 9,262 Year 6 2024 21,246 18,098 10,159 9,830 7,611 9,332 Year 7 2025 21,279 18,352 10,216 9,916 7,675 9,402 Year 8 2026 21,313 18,605 10,273 10,001 7,739 9,473 Year 9 2027 21,346 18,859 10,330 10,087 7,804 9,543 Year 10 2028 21,379 19,113 10,387 10,172 7,868 9,614 Ten-Year Increase 332 2,538 571 854 643 704 Transportation Impact Fee $2,159 $1,023 $8,248 $2,800 $1,130 $3,082 Revenue Subtotal $716,788 $2,596,374 $4,709,608 $2,391,200 $726,590 $2,169,728 Source: Ti s chl erBi s e a na l ys i s Projected Revenue => $13,310,288 Total Expenditures => $15,296,250 General Fund's Share => $1,985,962 TischlerBise | www.tischlerbise.com 20  Wastewater Impact Fee Analysis o Plan-Based Methodology WASTEWATER IMPACT FEE Residential & Nonresidential Development Wastewater Flow from Equivalent Residential Unit (ERU) Multiplied by Capital Cost Per Gallon Plan-Based Capital Cost Growth Related Costs for Capacity Improvements Credit for Future Debt Payment TischlerBise | www.tischlerbise.com 21  Wastewater Impact Fee Analysis o Sewer & Stormwater Component – Future Wastewater Projects Growth's Growth's Project Title Total Share Cost CSO - Close CSO #42 $2,000,000 10% $200,000 CSO - Mackworth Street and Ocean Avenue Sewer Separation Project $6,850,000 10% $685,000 CSO - Dartmouth Street Sewer Separation Project $2,520,000 10% $252,000 CMOM - Inflow and Infiltration Program $4,050,000 50% $2,025,000 CMOM - Pump Station Rehabilitation $3,350,000 25% $837,500 Eastern Waterfront Sewer / Stormwater Extension & Outfall (Thames St) $1,025,000 85% $871,250 Franklin Street Storm Drain $5,300,000 75% $3,975,000 Warren Ave Storm Drain - 517 Warren Ave to 659 Warren Ave $990,000 10% $99,000 TOTAL $26,085,000 $8,944,750 Growth's Cost of Wastewater Projects $8,944,750 10-Year Increase in Wastewater Flow (gallons) 403,049 Capital Cost per Gallon $22.19 TischlerBise | www.tischlerbise.com 22  Wastewater Impact Fee Analysis o Credit for Future Debt Payment Component o To avoid future growth double paying for wastewater facilities, a credit is necessary for future debt payments on past sewer and stormwater projects. Projected Payment/ Fiscal Year Payment Wastewater Gallon Flow (gals) Base Year $4,984,702 5,661,470 $0.88 2019 $5,301,355 5,701,775 $0.93 2020 $5,185,898 5,742,080 $0.90 2021 $5,039,052 5,782,385 $0.87 2022 $4,943,283 5,822,690 $0.85 2023 $4,435,393 5,862,995 $0.76 2024 $4,084,329 5,903,299 $0.69 2025 $4,023,542 5,943,604 $0.68 2026 $3,924,669 5,983,909 $0.66 2027 $3,833,159 6,024,214 $0.64 2028 $3,671,719 6,064,519 $0.61 Total $49,427,101 $8.47 Discount Rate 3.00% Total Credit $7.22 TischlerBise | www.tischlerbise.com 23  Wastewater Impact Fee Analysis o Maximum Defensible Fee Growth Capital Cost per Gallon => $22.19 Debt Service Credit per Gallon => ($7.22) Capital Cost per Gallon of Capacity => $14.97 Max Daily Gallons per ERU => 126 Meter Size Maximum Capacity Ratio (inches) Defensible Fee All Development (per meter) 5/8 1.00 $1,886 3/4 1.50 $2,829 1 2.50 $4,715 1.5 5.00 $9,430 2 8.00 $15,088 3 16.00 $30,176 6 50.00 $94,300 8 80.00 $150,880 Source: American Water Works Association, Principles of Water Rates, Fees, and Charges, M1, 7th ed., 2017; TischlerBise analysis TischlerBise | www.tischlerbise.com 24  Wastewater Impact Fee Analysis o Wastewater Impact Fee Revenue Cost Attributable Total Cost to Growth Wastewater Facilities $26,085,000 $8,944,750 Total Expenditures $26,085,000 $8,944,750 Projected Wastewater Impact Fee Revenue Residential Nonresidential Year Population Jobs Base 2018 83,250 67,270 Year 1 2019 83,678 67,959 Year 2 2020 84,106 68,648 Year 3 2021 84,534 69,337 Year 4 2022 84,962 70,026 Year 5 2023 85,390 70,715 Year 6 2024 85,818 71,404 Year 7 2025 86,246 72,093 Year 8 2026 86,673 72,782 Year 9 2027 87,101 73,471 Year 10 2028 87,529 74,160 Ten-Year Increase 4,279 6,890 Water Demand, per Pop./Job 35.2 40.6 Cost per Gallon $14.97 $14.97 Revenue Subtotal $2,254,793 $4,187,618 Source: Ti s chl erBi s e a na l ys i s Projected Revenue => $6,442,411 Total Expenditures => $8,944,750 General Sewer Fund's Share => $2,502,339 TischlerBise | www.tischlerbise.com 25  City of Portland Impact Fee Study o Maximum Defensible Impact Fees Development Type Parks & Rec Transportation Wastewaster Total Residential (per housing unit/per water meter) Single Family/Duplex $1,126 $2,159 $1,886 $5,171 Multifamily $752 $1,023 $1,886 $3,661 Nonresidential (per 1,000 square feet/per water meter) Retail $534 $8,248 $4,715 $13,497 Office $677 $2,800 $4,715 $8,192 Industrial $363 $1,130 $4,715 $6,208 Institutional $645 $3,082 $4,715 $8,442 Accommodation (per hotel room/per water meter) Hotel $875 $2,404 $4,715 $7,994 Note: a 5/8 i nch meter i s s hown for res i denti a l devel opment a nd a 1 i nch meter i s s hown for nonres i denti a l devel opment, however, the wa s tewa ter fee wi l l be a s s es s ed ba s ed on the devel opment's meter s i ze. TischlerBise | www.tischlerbise.com 26  Comments/Questions TischlerBise | www.tischlerbise.com 27  Comparables o Impact fees from comparable communities nationwide compared to Portland’s Maximum Defensible Fee Maximum National Averages Development Type Defensible Fee Burlington, VT Concord, NH Freeport, ME Bozeman, MT Boulder, CO Eugene, OR (2015)* Parks and Recreation (per housing unit/hotel room/1,000 square feet) Single Family/Duplex $1,126 $1,486 $1,094 - - $5,603 $4,246 $2,812 Multifamily $752 $743 $664 - - $3,936 $2,686 $2,099 Retail $534 $418 - - - - $413 n/a Office $677 $418 - - - - $1,134 n/a Industrial $363 $422 - - - - $694 n/a Institutional $645 $418 - - - - $1,134 n/a Hotel $875 $418 - - - - $1,697 n/a Transportation (per housing unit/hotel room/1,000 square feet) Single Family/Duplex $2,159 $386 $2,110 $1,500 for the first $4,497 $216 $2,113 $3,256 Multifamily $1,023 $196 $1,450 2,500 GFA plus $3,053 $149 $1,226 $2,201 Retail $8,248 $736 $3,330 $300 for each $10,476 $540 $5,093 $5,605 Office $2,800 $676 $1,700 additional 250 $4,535 $220 $3,212 $3,403 Industrial $1,130 $262 $1,090 GFA. Not $2,866 $140 $2,050 $2,063 Institutional $3,082 $676 $2,207 exceeding $5,435 $180 $1,965 n/a Hotel $2,404 $676 $1,817 $30,000. $2,315 $168 $1,268 n/a Wastewater (per meter) Single Family/Duplex $1,886 - - - $775 - $2,396 $3,694 Multifamily $2,829 - - - $1,545 - $2,040 $1,777 Retail $4,715 - - - $3,556 - $683 $663 Office $4,715 - - - $3,556 - $1,036 $640 Industrial $4,715 - - - $3,556 - $687 $642 Institutional $4,715 - - - $3,556 - $2,163 n/a Hotel $4,715 - - - $3,556 - $2,817 n/a *Source: National Impact Fee Survey: 2015, Duncan Associates, November, 2015 Note: Single family units are assumed to be 2,000 square feet and multifamily units to be 1,000 square feet. A 5/8 inch meter is shown for single family development, 3/4 inch for multifamily development, and a 1 inch meter is shown for nonresidential development, however, the wastewater fee will be assessed based on the development's meter size. To estimate general transportation fees for Scarborough, ME the PM peak hour trip generation rates from Trip Generation, Institute of Transportation Engineers, 10th Edition (2017) are used. Not shown in the figure are the additional impact fees the comparable communities assess including school, fire, and police. TischlerBise | www.tischlerbise.com 28  Comparables o Impact fees from surrounding communities compared to Portland’s Maximum Defensible Fee Maximum North Development Type Defensible Fee Brunswick1 Gorham2 Saco3 Berwick Berwick4 Scarborough Freeport Sanford York Lewiston Parks and Recreation (per housing unit/hotel room/1,000 square feet) Single Family/Duplex $1,126 $197 (avg.) $1,715 $1,700 $500/bedro $1,988 - - - - - Multifamily $752 $142 (avg.) $1,108 - $500/bedro $1,317 - - - - - Retail & Services $534 - - - - - - - - - - Office $677 - - - - - - - - - - Industrial $363 - - - - - - - - - - Institutional $645 - - - - - - - - - - Hotel $875 - - - - - - - - - - Transportation (per housing unit/hotel room/1,000 square feet) Single Family/Duplex $2,159 - - - - - - - $1,042/PM $1,500 for the $261 - In certain Multifamily $1,023 - - - - - - - peak hour trip first 2,500 GFA $1,013/PM areas Retail $8,248 - - - - - - - ends (Dunstan), plus $300 for peak hour based Office $2,800 - - - - - - - on $990/PM peak each additional trip, traffic Industrial $1,130 - - - - - - - hour trip ends 250 GFA. Not to depending study Institutional $3,082 - - - - - - - (Haigis Pkwy). exceed $30,000. on location. Hotel $2,404 - - - - - - - Wastewater (meter size, inches) 5/8 $1,886 - - - - - - - $790 3/4 $2,829 - - - - - - - $1,140 Specialized 1 $4,715 - - - - - - - $2,020 sewer $2,500/ 1.5 $9,430 - - $2,700/ - - - - - - assessment $2,500 unit or 2 $15,088 - - 185 gpd - - - - - $8,075 for certain EDU 3 $30,176 - - - - - areas - - $18,165 6 $94,300 - - - - - - - $72,650 8 $150,880 - - - - - - - $129,150 [1] Brunswick has a graduated park impact fee based on size of unit. For purposes of comparison, single family and multifamily fees have been averaged. [2] Gorham has a graduated park impact fee for multifamily units based on size of unit. For purposes of comparison, multi-family fees have been averaged. [3] Saco charges separate recreation and open space fees, which have been combined here. [4] Berwick has a graduated park and recreation impact fee for singlefamily and multifamily units based on number of bedrooms. Fees have been averaged. TischlerBise | www.tischlerbise.com 29  Fee Examples o The table below illustrates the impact fee for several different types of developments. Maximum Development Type Parks & Rec Transportation Wastewaster Defensible Fee Multifamily Rental (75 housing units) $56,400 $76,725 $30,176^ $163,301 Multifamily Condominium (50 housing units) $37,600 $51,150 $30,176^ $118,926 Downtown Hotel (150 bedrooms) $131,250 $360,600 $30,176^ $522,026 Highway/ Suburban Airport Hotel (200 bedrooms) $175,000 $480,800 $30,176^ $685,976 Office (50,000 square feet) + Retail (7,500 square feet) $37,855 $201,860 $15,088* $254,803 Industrial (50,000 square feet) $18,150 $56,500 $15,088* $89,738 Shopping Center (105,000 square feet) $56,070 $866,040 $30,176^ $952,286 Note: The wastewater fee is based on meter size, not level of development. Developments noted with ^ are assumed to have a 3 inch meter. Developments noted with * are assumed to have a 2 inch meter. TischlerBise | www.tischlerbise.com 30  Appendix o Share of Impact Days Calculation o The calculation multiples the number of peak season residents (permanent, seasonal, and visitors) and inflow commuters by the number of days within the City of Portland. o Local workers are included within the total for residents. Residents and Inflow Commuters in 2015 Cumulative Impact Days per Year Cost Allocation for Parks Inflow Residents Residential¹ Nonresidential² Total Residential Nonresidential Commuters 82,049 47,245 29,948,016 11,811,250 41,759,266 72% 28% 1. Da ys per Yea r = 365 365 2. Da ys per Yea r = 250 (5 Da ys per Week x 50 Weeks per Yea r) 250 Source: U.S. Cens us Burea u, OnTheMa p 6.1.1 Appl i ca ti on a nd LEHD Ori gi n-Des ti na ti on Empl oyment Sta ti s ti cs . TischlerBise | www.tischlerbise.com 31  Appendix o To understand the effect of the maximum defensible fees on affordable housing, a household with 80% of the City’s median income is compared to the cost of living. Median Annual Median Annual Household 80% of Median Household Income (2016) Household Income (2018) Income Factor Annual Income Monthly Income $65,571 $68,560 80% $54,848 $4,571 Source: U.S. Cens us Burea u, 2012-2016 Ameri ca n Communi ty Survey 5-Yea r Es ti ma tes ; U.S. Burea u of La bor Sta ti s ti cs CPI Ca l cul a tor Current Housing Affordability Condition Monthly Income Monthly Cost Cost Burden Monthly cost of living components for Owner-Occupied $4,571 $1,733 37.9% a owner-occupied unit include: Renter-Occupied $4,571 $1,013 22.2% mortgage payment, property tax, stormwater fee, utilities, digital Housing Affordability with Impact Fees utilities, and homeowners insurance. Condition Monthly Income Monthly Cost Cost Burden Owner-Occupied $4,571 $1,763 38.6% Monthly cost of living for a renter- Renter-Occupied $4,571 $1,023 22.4% occupied unit is from the US Census and adjusted for inflation. Impact Fee Effect on Affordable Housing Condition Change Owner-Occupied 0.7% Renter-Occupied 0.2% TischlerBise | www.tischlerbise.com 32  Appendix o Residential Development Projections o To capture the full demand on City facilities, projections include seasonal and visitor populations o The seasonal population is considered those that have a second home in Portland o The visitor population includes overnight and day visitors to the City Base Year Total 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Peak Population Permanent 67,305 67,644 67,983 68,322 68,661 69,001 69,340 69,679 70,018 70,357 70,696 3,391 Seasonal 7,386 7,432 7,478 7,523 7,569 7,615 7,660 7,706 7,752 7,797 7,843 457 Visitor 8,559 8,602 8,645 8,688 8,731 8,775 8,818 8,861 8,904 8,947 8,990 431 Total 83,250 83,678 84,106 84,534 84,962 85,390 85,818 86,246 86,673 87,101 87,529 4,279 Housing Unit Single Family/Duplex 21,047 21,080 21,113 21,147 21,180 21,213 21,246 21,279 21,313 21,346 21,379 332 Multifamily 16,575 16,829 17,083 17,336 17,590 17,844 18,098 18,352 18,605 18,859 19,113 2,538 Total 37,622 37,909 38,196 38,483 38,770 39,057 39,344 39,631 39,918 40,205 40,492 2,870 Source: Portl a nd's Pl a n 2030; Ti s chl erBi s e a na l ys i s TischlerBise | www.tischlerbise.com 33  Appendix o Nonresidential Development Projections Base Year Total Industry 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Employment Retail 13,057 13,191 13,325 13,458 13,592 13,726 13,860 13,993 14,127 14,261 14,395 1,337 Office 24,772 25,026 25,280 25,533 25,787 26,041 26,295 26,548 26,802 27,056 27,309 2,537 Industrial 9,992 10,094 10,197 10,299 10,401 10,504 10,606 10,708 10,811 10,913 11,015 1,023 Institution 19,449 19,648 19,847 20,046 20,245 20,445 20,644 20,843 21,042 21,241 21,441 1,992 Total 67,270 67,959 68,648 69,337 70,026 70,715 71,404 72,093 72,782 73,471 74,160 6,890 Nonresidential Floor Area (1,000 sq. ft.) Retail 9,817 9,874 9,931 9,988 10,045 10,102 10,159 10,216 10,273 10,330 10,387 571 Office 9,318 9,403 9,489 9,574 9,660 9,745 9,830 9,916 10,001 10,087 10,172 854 Industrial 7,225 7,289 7,353 7,418 7,482 7,546 7,611 7,675 7,739 7,804 7,868 643 Institution 8,909 8,980 9,050 9,121 9,191 9,262 9,332 9,402 9,473 9,543 9,614 704 Total 35,268 35,546 35,823 36,100 36,378 36,655 36,932 37,209 37,487 37,764 38,041 2,773 Source: Portland Area Comprehensive Transportation System (PACTS); City of Portland; TischlerBise analysis TischlerBise | www.tischlerbise.com 34  Appendix o Projected Average Daily Person Trips Base Year Total 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Residential Person Trips Single Family/Duplex 162,904 163,161 163,418 163,675 163,932 164,189 164,446 164,703 164,960 165,216 165,473 2,570 Multifamily 60,830 61,762 62,693 63,625 64,556 65,487 66,419 67,350 68,282 69,213 70,145 9,314 Subtotal 223,734 224,922 226,111 227,299 228,488 229,676 230,865 232,053 233,241 234,430 235,618 11,884 Nonresidential Person Trips Retail 290,177 291,864 293,551 295,238 296,925 298,612 300,299 301,987 303,674 305,361 307,048 16,871 Office 93,550 94,408 95,266 96,124 96,982 97,840 98,698 99,555 100,413 101,271 102,129 8,579 Industrial 29,260 29,520 29,781 30,041 30,302 30,562 30,823 31,083 31,344 31,604 31,865 2,605 Institutional 98,450 99,228 100,006 100,785 101,563 102,341 103,119 103,897 104,676 105,454 106,232 7,782 Subtotal 511,437 515,021 518,604 522,188 525,772 529,356 532,939 536,523 540,107 543,690 547,274 35,837 Grand Total Person Trips 735,171 739,943 744,715 749,487 754,260 759,032 763,804 768,576 773,348 778,120 782,892 47,721 Person Trips by Transportation Mode Total Vehicle Person Trips 611,790 615,750 619,711 623,672 627,632 631,593 635,554 639,514 643,475 647,436 651,396 39,607 Total Transit Person Trips 12,466 12,550 12,633 12,717 12,800 12,884 12,967 13,051 13,135 13,218 13,302 836 Total Non-Motorized Trips 110,915 111,643 112,371 113,099 113,827 114,555 115,283 116,011 116,738 117,466 118,194 7,279 Grand Total Person Trips 735,171 739,943 744,715 749,487 754,260 759,032 763,804 768,576 773,348 778,120 782,892 47,721 Source: Tri p Genera ti on, Ins ti tute of Tra ns porta ti on Engi neers , 10th Edi ti on (2017); Na ti ona l Hous ehol d Tra vel Survey da ta , 2017; Ti s chl erBi s e a na l ys i s TischlerBise | www.tischlerbise.com 35  Appendix o Average Daily Person Trips by Development Type Trip Person Trips/Unit Person Trip Adjustment Non- Development Type Ends Factor Total Vehicle Transit motorized Single Family/Duplex 13.34 58% 7.74 6.66 0.08 1.01 Multifamily 6.32 58% 3.67 3.16 0.04 0.48 Retail 77.80 38% 29.56 24.24 0.59 4.73 Office 20.07 50% 10.04 8.23 0.20 1.61 Industrial 8.10 50% 4.05 3.32 0.08 0.65 Institutional 22.09 50% 11.05 9.06 0.23 1.76 Hotel 17.23 50% 8.62 7.07 0.17 1.38 Source: Tri p Genera ti on, Ins ti tute of Tra ns porta ti on Engi neers , 10th Edi ti on (2017); Na ti ona l Hous ehol d Tra vel Survey da ta , 2017; Ti s chl erBi s e a na l ys i s Note: Tri p ra tes a re s hown per hous i ng uni t for res i denti a l l a nd us es a nd per 1,000 s qua re feet of fl oor a rea for nonres i denti a l l a nd us es , except Hotel i s s hown per hotel room. TischlerBise | www.tischlerbise.com 36  Appendix o Water Meter Capacity by Size Meter Size Meter Capacity (inches) Capacity Ratio 5/8 20 1.00 3/4 30 1.50 1 50 2.50 1 1/2 100 5.00 2 160 8.00 3 320 16.00 6 1,000 50.00 8 1,600 80.00 Capacity ratios are based on meter capacity standards published by American Water Works Association, Principles of Water Rates, Fees, and Charges, M1, 7th ed., 2017 TischlerBise | www.tischlerbise.com 37  DEMOGRAPHIC AND LAND USE ASSUMPTION MEMORANDUM Attachment 6 Portland, Maine MEMORANDUM TO: Helen Donaldson, City of Portland, Planning and Urban Development FROM: Carson Bise, AICP, TischlerBise Colin McAweeney, TischlerBise DATE: June 5, 2018 RE: DRAFT Demographic Data and Development Projections for Impact Fee Study As part of our Work Scope, TischlerBise has prepared documentation on demographic data and development projections that will be used in the Impact Fee Study for Transportation, Parks and Open Space, and Wastewater. The data estimates and projections are used in the study’s calculations and to illustrate the possible future pace of service demands on the City’s infrastructure. Furthermore, the memo demonstrates the history of development and base year development levels in Portland. The base year assumptions are used in the impact fee calculations to determine current levels of service. The factors provide assumptions for the final impact fee model and, once finalized, this memo will become part of the final report and/or model documentation. This memo includes discussion and findings on: • Household/ Housing Unit Population • Current population and housing unit estimates • Residential projections • Current employment and nonresidential floor area estimates • Nonresidential projections • Current and projected person vehicle trips • Current and projected wastewater flows Note: calculations throughout this technical memo are based on an analysis conducted using Excel software. Results are discussed in the memo using one-and two-digit places (in most cases), which represent rounded figures. However, the analysis itself uses figures carried to their ultimate decimal places; therefore, the sums and products generated in the analysis may not equal the sum or product if the reader replicates the calculation with the factors shown in the report (due to the rounding of figures shown, not in the analysis). 1  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine POPULATION AND HOUSING CHARACTERISTICS Impact fees often use per capita standards and persons per housing unit or persons per household to derive proportionate share fee amounts. Housing types have varying household sizes and, consequently, a varying demand on City infrastructure and services. Thus, it is important to differentiate between housing types and size. When persons per housing unit (PPHU) is used in the fee calculations, infrastructure standards are derived using year-round population. In contrast, when persons per household (PPHH) is used in the fee calculations, the fee methodology assumes all housing units will be occupied, thus requiring seasonal or peak population to be used when deriving infrastructure standards. From the Maine Office of Tourism, the Greater Portland and Casco Bay region saw 5.4 million visitors in 2016. As a result, it is not just permanent residents occupying housing units in Portland. In response, City infrastructure and operating service levels are sized to accommodate not just permanent residents, but seasonal residents, seasonal workers, and visitors as well. Thus, TischlerBise recommends that fees for residential development in the City of Portland be imposed according to the persons per household (PPHH). Persons per household (PPHH) will be held constant over the projection period since the study represents a “snapshot approach” of current levels of service and costs. Based on household characteristics, TischlerBise recommends using two housing unit categories for the impact fee study: (1) Single Family and (2) Multifamily. “Single family/Duplex” units include single family detached, single family attached, duplexes, and mobile homes, as defined in the City’s land use code. Multifamily units include structures with more than 2 units. Figure 1 shows the US Census, American Community Survey 2016 5-Year Estimates data for the City of Portland. Single family/Duplex units have a household size of 2.38 persons per unit and multifamily units have a household size of 1.59 persons per unit. Additionally, single family/duplex units have a vacancy rate of 9.8 percent and are 70 percent of the housing stock in Portland. Multifamily units have a vacancy rate of 9.4 percent and are 30 percent of the housing stock in Portland. Figure 1. Persons per Household House- Persons per Housing Persons per Housing Vacancy Type of Structure Persons holds Household Units Housing Unit Mix Rate Single Family/Duplex Unit1 50,010 21,052 2.38 23,338 2.14 69.8% 9.8% 2 Multifamily Unit 14,542 9,149 1.59 10,098 1.44 30.2% 9.4% Total 64,552 30,201 2.14 33,436 1.93 9.7% Source: Ti s chl erBi s e a na l ys i s ; U.S. Cens us Burea u, 2012-2016 Ameri ca n Communi ty Survey, 5-Yea r Es ti ma tes [1] Incl udes deta ched, a tta ched, dupl exes , a nd mobi l e home uni ts . [2] Incl udes s tructures wi th more tha n 2 uni ts . 2  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine BASE YEAR POPULATION AND HOUSING UNITS Permanent Residents Along with the population estimate for residents in single family and multifamily units, the American Community Survey provides population estimates for those residing in group quarters (i.e. student housing and military residents). Found in Figure 2, the household population and group quarters are considered the City’s permanent population. In 2016 it is estimated that the permanent population was 66,627. Figure 2. Permanent Population, 2016 Type of Structure Persons % Single Family/Duplex Unit 50,010 75.1% Multifamily Unit 14,542 21.8% Group Quarters 2,075 3.1% Total 66,627 100.0% Source: U.S. Cens us Burea u, 2012-2016 Ameri ca n Communi ty Survey, 5-Yea r Es ti ma tes In the recently published Portland’s Plan 2030, several population growth scenarios, modeled by the Greater Portland Council of Governments (GPCOG), are played out. The comprehensive plan shows that a medium-level growth scenario would result in a 2030 population of 71,374. Using this projection for the impact fee study, by 2030 the City of Portland is forecasted to have a permanent population of 71,374. To estimate the City’s population in the interim years, a straight-line approach is used. Figure 3 illustrates the growth in permanent population. In the base year, 2018, there is estimated to be 67,305 permanent residents in Portland. Figure 3. Base Year Permanent Population 5-Year Increments Base Year Total 2016 2017 2018 2019 2020 2025 2030 Increase Permanent Population 66,627 66,966 67,305 67,644 67,983 69,679 71,374 4,747 Percent Increase 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 7.1% Source: U.S. Cens us Burea u, 2012-2016 Ameri ca n Communi ty Survey, 5-Yea r Es ti ma tes ; Ci ty of Portl a nd Pl a nni ng Depa rtment; Ti s chl erBi s e a na l ys i s Seasonal Residents As mentioned, the impact fee study will be using a peak population of Portland because of the large tourism industry. It is assumed that City infrastructure and services are sized to serve a peak population not just the permanent population. In this case, two additional populations need to be calculated: seasonal and visitor. The seasonal population includes residents who have second homes in Portland and the seasonal labor influx during peak tourism months. The visitor population includes overnight and day visitors. 3  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine To calculate the seasonal population, the study assumes full occupancy of the housing units in the city. From the US Census data, in 2016, there were 2,286 vacant single family/duplex homes and 949 vacant multifamily homes. The seasonal population is calculated by multiplying the units by the corresponding the persons per household factor (PPHH). In 2016, there was a seasonal population of 6,950. Figure 4. Seasonal Population, 2016 Vacant Persons per Seasonal Type of Structure Units Household Population Single Family/Duplex Unit1 2,286 2.38 5,441 2 Multifamily Unit 949 1.59 1,509 Total 3,235 2.15 6,950 Source: Ti s chl erBi s e a na l ys i s ; U.S. Cens us Burea u, 2012-2016 Ameri ca n Communi ty Survey, 5-Yea r Es ti ma tes [1] Incl udes deta ched, a tta ched, dupl exes , a nd mobi l e home uni ts . [2] Incl udes s tructures wi th more tha n 2 uni ts . Seasonal Visitors The visitor population for Portland is found by first analyzing the state and regional totals. In 2016, there were 41.2 million visitors to Maine. The majority of the visitors came in the summer, resulting in the average daily number of visitors in the summer being 185 percent of the annual average. Figure 5. State of Maine Visitor Totals, 2016 Average Daily Percent of Season Total Visitors Visitors Annual Ave. Winter 5,615,670 46,156 41% Summer 25,328,066 208,176 185% Fall 10,230,660 84,088 75% Total 41,174,396 112,807 100% Source: Ma i ne Offi ce of Touri s m, 2016 Calendar Year Annual Report According to the Maine Office of Tourism (MOT), there were 5,360,000 visitors (overnight and day visitors) to the Greater Portland and Casco Bay Region in 2016. Results of the MOT’s visitor survey indicate that the Portland’s Waterfront was the top attraction for 33 percent of overnight visitors and for 30 percent of day visitors. The study will use a conservative method and use these percentages to allocate the regional visitor total to the City of Portland. In Figure 6, the City of Portland’s daily peak visitor population is calculated. The estimated total of overnight visitors to Portland is 745,800. The estimated total of day visitors to Portland is 930,000. As a result, the total annual visitors to the City of Portland is 1,675,800, or an average of 4,591 per day. Found above, during the summer statewide, the visitor population spikes to 185 percent of the annual average. This factor is applied to the City’s average to calculate the daily peak season visitor total. As a result, in 2016, it is estimated that the City of Portland’s daily peak season visitor population was 8,473. 4  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine Figure 6. City of Portland Peak Season Visitor Population, 2016 Overnight Visitors to Region 2,260,000 City's Proportion of Region 33% Overnight Visitors to Portland 745,800 Day Visitors to Region 3,100,000 City's Proportion of Region 30% Day Visitors to Portland 930,000 Total Annual Visitors to Portland 1,675,800 Average Daily Visitors 4,591 Peak Season Multipler 185% Daily Peak Season Visitor Total 8,473 Source: Ma i ne Offi ce of Touri s m, 2016; Ti s chl erBi s e Ana l ys i s The study assumes that the visitor population will have a positive relationship and follow the permanent population’s growth. From 2016 to 2018 there is a 1.02 percent increase in permanent population in Portland; this is applied to the visitor population to calculate the base year total. It is assumed that during the peak seasonal period the City’s seasonal population (seasonal residents and workers) occupies the vacant housing units. As a result, the seasonal population is calculated based on housing growth, described in the next section of the report. In 2018, it is estimated that the peak population for the City of Portland is 83,250. Figure 7. Base Year Peak Population Base Year 2016 2017 2018 Peak Population Permanent 66,627 66,966 67,305 Seasonal 6,950 7,168 7,386 Visitor 8,473 8,516 8,559 Total 82,049 82,650 83,250 Source: Ti s chl eBi s e a na l ys i s Base Year Housing Stock To understand the housing growth in the City of Portland, the building permit data from the last five years is collected in Figure 8. Over the past 5 years there has been an increase of 1,435 housing units in Portland and, on average, there have been 33 single family/duplex and 254 multifamily housing units constructed annually. It is assumed this trend will continue and the averages are used to project housing development in the City of Portland. Figure 8. Permitted Housing Units Housing Type 2013 2014 2015 2016 2017 Total Average Single Family/Duplex 26 53 23 38 26 166 33 Multifamily 168 97 187 611 206 1,269 254 Total 194 150 210 649 232 1,435 287 Source: City of Portland Planning Department 5  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine By examining parcel data provided by the City with a GIS (Geographic Information System) software, the base year housing stock is estimated in Figure 9. In total, 56 percent of the housing in the City of Portland is single family/duplex and 44 percent multifamily. Consistent with the City’s land use code, single family units include single family detached, single family attached, duplexes, and mobile homes. Multifamily units include structures with 3 or more units. Figure 9. Base Year Housing Stock (Housing Units) Base Year Housing Type 2018 % Single Family/Duplex 21,047 56% Multifamily 16,575 44% Total 37,622 100% Source: Ci ty of Portl a nd GIS Da ta POPULATION AND HOUSING UNIT PROJECTIONS Illustrated in Figure 10, by using the projections from Portland’s Plan 2030 for permanent population, a growth of 3,391 residents is projected by 2028. The seasonal population is assumed to grow with housing development. The vacancy rates found in Figure 1 are assumed to hold through the projection period and the seasonal population is found by combining the estimated vacant units with the corresponding PPHH factor. Lastly, to project the daily peak visitor population growth, the annual percent increase in permanent population is applied. Overall, there is a peak population increase of 4,279. Of the total population in 2028, 81 percent is permanent, 9 percent is seasonal, and 10 percent is visitor population. To project the housing unit growth in Portland, the five-year annual average of building permits is used (see Figure 8). Over the ten-year projection period, the housing stock in the city is estimated to increase by 2,870 units (88 percent multifamily units). Figure 10. City of Portland Annual Residential Development Projections Base Year Total 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Peak Population Permanent 67,305 67,644 67,983 68,322 68,661 69,001 69,340 69,679 70,018 70,357 70,696 3,391 Seasonal 7,386 7,432 7,478 7,523 7,569 7,615 7,660 7,706 7,752 7,797 7,843 457 Visitor 8,559 8,602 8,645 8,688 8,731 8,775 8,818 8,861 8,904 8,947 8,990 431 Total 83,250 83,678 84,106 84,534 84,962 85,390 85,818 86,246 86,673 87,101 87,529 4,279 Housing Unit Single Family/Duplex 21,047 21,080 21,113 21,147 21,180 21,213 21,246 21,279 21,313 21,346 21,379 332 Multifamily 16,575 16,829 17,083 17,336 17,590 17,844 18,098 18,352 18,605 18,859 19,113 2,538 Total 37,622 37,909 38,196 38,483 38,770 39,057 39,344 39,631 39,918 40,205 40,492 2,870 Source: Portl a nd's Pl a n 2030; Ti s chl erBi s e a na l ys i s 6  DEMOGRAPHIC AND LAND USE ASSUMPTION MEMORANDUM Portland, Maine CURRENT EMPLOYMENT AND NONRESIDENTIAL FLOOR AREA The impact fee study will include nonresidential development as well. According to the U.S. Census Bureau’s web application, OnTheMap, there were 65,203 jobs in Portland in 2015. The education, health care, and social assistance services accounted for the largest percentage of the total (26.2 percent). Figure 11. Employment by Industry Sector, 2015 Industry Sector Employment % Agriculture, forestry, fishing and hunting, and mining 18 0.0% Utilities 395 0.6% Construction 2,015 3.1% Manufacturing 2,714 4.2% Wholesale trade 2478 3.8% Retail trade 5,302 8.1% Transportation and warehousing, and utilities 2,065 3.2% Information 1,529 2.3% Finance and insurance, and real estate and rental and leasing 8,114 12.4% Professional, scientific, mgmt. , admin., and waste mgmt. services 11,893 18.2% Educational services, and health care and social assistance 17,057 26.2% Arts, entertainment, recreation, accommodation, and food services 7,354 11.3% Other services, except public administration 2,475 3.8% Public administration 1,794 2.8% Total 65,203 100.0% Source: U.S. Cens us Burea u, OnTheMa p 2015 The fourteen industry sectors in Figure 11 have been compiled into four industries: retail, office, industrial, and institutional. The City of Portland’s employment is pretty well dispersed between the industries, with the institutional and office industries accounting for the highest percentages of employment, Figure 12. Figure 12. Employment by Industry, 2015 Industry Jobs % Retail 12,656 19% Office 24,011 37% Industrial 9,685 15% Institutional 18,851 29% Total 65,203 100% Source: U.S. Cens us Burea u, OnTheMa p 2015 Since the breakdown is for 2015, a projection is necessary to estimate the job totals for the base year. To estimate the current employment in the City of Portland, employment projections from Portland Area Comprehensive Transportation System (PACTS) are used. Based on employment projections at the Traffic Analysis Zone (TAZ) level, PACTS forecast an employment increase of 27.5 percent from 2014 to 2040. The annual percent increase of the PACTS projection is used to calculate the employment growth in Figure 13. The breakdown by industry in Figure 12 is then applied to total increase to calculate the growth in each industry. In the base year, it is estimated that there are 67,270 jobs in Portland. 7  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine Figure 13. Base Year Employment Base Year 2015 2016 2017 2018 Employment Retail 12,656 12,790 12,923 13,057 Office 24,011 24,265 24,518 24,772 Industrial 9,685 9,787 9,890 9,992 Institution 18,851 19,050 19,249 19,449 Total 65,203 65,892 66,581 67,270 Source: Portland Area Comprehensive Transportation System (PACTS); TischlerBise analysis Base year nonresidential floor area for the retail, office, industrial, and institutional industry sectors are calculated with GIS parcel data provided by City staff. In Figure 14, there is a total of 35.3 million square feet of nonresidential floor area in Portland in 2018, with all sectors accounting for at least 20 percent. Additionally, the figure lists the City’s land use categories used to determine the floor area of each industry. Figure 14. Base Year Nonresidential Floor Area Nonresidential Industry Sq. Ft. % Land Use Categories Retail 9,816,540 28% Multiuse Commercial, Retail & Personal Services Office 9,317,766 26% Office & Business Services, Communications, Commercial Condos Industrial 7,224,665 20% Manufacturing & Constr., Multiuse Ind., Transport., Warehouse, Wholesale Institutional 8,909,498 25% Charitable, Government, Scientific Inst., Religious, Other Exempt by Law Total 35,268,468 100% Source: City of Portland GIS data 8  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine NONRESIDENTIAL FLOOR AREA AND EMPLOYMENT PROJECTIONS To project nonresidential floor area, square feet per employee factors from the Institute for Transportation Engineer’s Trip Generation (2017) are used. To estimate the factor for retail, the shopping center factor is used, for office the general office factor is used, for industrial the manufacturing factor is used, and for institutional the hospital factor is used (Figure 16). Figure 15. Institute of Transportation Engineers Nonresidential Land Use Factors ITE Demand Emp Per Sq Ft Code Land Use Unit Dmd Unit Per Emp 110 Light Industrial 1,000 Sq Ft 1.63 615 130 Industrial Park 1,000 Sq Ft 1.16 864 140 Manufacturing 1,000 Sq Ft 1.59 628 150 Warehousing 1,000 Sq Ft 0.34 2,902 254 Assisted Living bed 0.61 na 320 Motel room 0.13 na 520 Elementary School 1,000 Sq Ft 0.93 1,076 530 High School 1,000 Sq Ft 0.63 1,581 540 Community College student 0.08 na 550 University/College student 0.18 na 565 Day Care student 0.19 na 610 Hospital 1,000 Sq Ft 2.83 354 620 Nursing Home 1,000 Sq Ft 2.28 438 710 General Office (avg size) 1,000 Sq Ft 2.97 337 760 Research & Dev Center 1,000 Sq Ft 3.42 292 770 Business Park 1,000 Sq Ft 3.08 325 820 Shopping Center (avg size) 1,000 Sq Ft 2.34 427 Source: Tri p Genera ti on, Ins ti tute of Tra ns porta ti on Engi neers , 10th Edi ti on (2017) Found in Figure 17, job growth over the next ten years is projected to follow PACTS’ annual percentage increase forecast. In total, 6,890 new jobs are projected by 2028. Each industry sector is projected to have an increase over 1,000 jobs, with office topping the four with an increase of 2,537 jobs. To project floor area, the square foot per job factors are applied to the corresponding job totals. Over the next ten years, it is projected that there will be a growth of 2.8 million nonresidential square feet in the City of Portland. The office and institutional industries are projected to have the largest increases in floor area, both over 700,000 square feet. 9  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine Figure 16. Employment and Nonresidential Floor Area Projections Base Year Total Industry 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Employment Retail 13,057 13,191 13,325 13,458 13,592 13,726 13,860 13,993 14,127 14,261 14,395 1,337 Office 24,772 25,026 25,280 25,533 25,787 26,041 26,295 26,548 26,802 27,056 27,309 2,537 Industrial 9,992 10,094 10,197 10,299 10,401 10,504 10,606 10,708 10,811 10,913 11,015 1,023 Institution 19,449 19,648 19,847 20,046 20,245 20,445 20,644 20,843 21,042 21,241 21,441 1,992 Total 67,270 67,959 68,648 69,337 70,026 70,715 71,404 72,093 72,782 73,471 74,160 6,890 Nonresidential Floor Area (1,000 sq. ft.) Retail 9,817 9,874 9,931 9,988 10,045 10,102 10,159 10,216 10,273 10,330 10,387 571 Office 9,318 9,403 9,489 9,574 9,660 9,745 9,830 9,916 10,001 10,087 10,172 854 Industrial 7,225 7,289 7,353 7,418 7,482 7,546 7,611 7,675 7,739 7,804 7,868 643 Institution 8,909 8,980 9,050 9,121 9,191 9,262 9,332 9,402 9,473 9,543 9,614 704 Total 35,268 35,546 35,823 36,100 36,378 36,655 36,932 37,209 37,487 37,764 38,041 2,773 Source: Portland Area Comprehensive Transportation System (PACTS); City of Portland; TischlerBise analysis PERSON TRIP GENERATION Portland is a unique community with residents and workers using varying modes to travel. In general, an impact fee study calculates future developments’ impact on the City’s transportation infrastructure. In suburban, greenfield communities that concentrate on roadway expansion to accommodate new vehicles, a development’s impact is best estimated by calculating the new vehicle trips or vehicle miles traveled (VMT) generated by the development. However, based on the urban environment and residents’ travel behaviors, a multimodal approach is necessary for the City of Portland. This is also consistent with the capital improvements identified in the City’s Capital Improvement Plan. As such, the multimodal approach will calculate the daily person trips generated by the varying development types in the study. To encompass the varying modes of travel used in Portland, the methodology includes persons per vehicle trip, transit trip, and non-motorized trips. Person Trip Methodology According to the Institute of Transportation Engineers (ITE), there are several elements necessary to calculate person trips. The following equation is provided in the ITE’s Trip Generation Handbook (2017): Person trips = [(vehicle occupancy) x (vehicle trips)] + transit trips + walk trips + bike trips To create a more streamlined approach, this study uses “non-motorized trips” as the sum of walk trip and bike trips. The Trip Generation Handbook outlines the general approach to calculating person trips (further detail of methodology used is described in following sections): 1. Estimate vehicle trips generated by development type. a. This study uses the vehicle trip rates found in ITE’s Trip Generation Manual (2017). 10  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine 2. Determine mode share and vehicle occupancy. a. Trip survey data from the National Household Transportation Survey (2017) is used to calculate needed factors. 3. Convert vehicle trips to person trips. a. This conversion calculates the total person trips by combining the vehicle trip mode share and vehicle occupancy. 4. Calculate the estimated person trips by mode. a. The mode share split is applied to the total person trip rate to calculate the specific person trip rate for vehicle, transit, and non-motorized trips per land use. Residential Vehicle Trips A customized vehicle trip rate is calculated for the single family and multifamily units in the City of Portland. In Figure 18, the most recent data from the American Community Survey is inputted into equations provided by the ITE to calculate the vehicle trip ends per housing unit factor. A single family/duplex unit is estimated to generate 7.6 trip ends on an average weekday and a multifamily unit is estimated to generate 3.6 trip ends on an average weekday. Figure 17. Customized Residential Vehicle Trip End Rates Hous ehol ds (2) Vehi cl es per Vehi cl es Si ngl e Mul ti fa mi l y Tota l Hous ehol d Ava i l a bl e (1) Fa mi l y/Dupl ex Uni ts HHs by Tenure Owner-occupi ed 23,000 12,312 680 12,992 1.77 Renter-occupi ed 17,976 8,740 8,469 17,209 1.04 TOTAL 40,976 21,052 9,149 30,201 1.36 Hous i ng Uni ts (6) => 23,338 10,098 33,436 Pers ons per Hous i ng Uni t => 2.14 1.44 1.93 Pers ons Tri p Vehi cl es by Tri p Avera ge Trip Ends per (3) Ends (4) Type of Hous i ng Ends (5) Tri p Ends Housing Unit Si ngl e Fa mi l y/Dupl ex 50,010 154,055 30,926 202,330 178,192 7.60 Mul ti fa mi l y 14,542 33,220 10,050 39,892 36,556 3.60 TOTAL 64,552 187,275 40,976 242,222 214,748 6.40 (1) Vehi cles a vailable by tenure from Ta ble B25046, 2012-2016 Ameri can Community Survey 5-Year Estimates. (2) Hous eholds by tenure and units in structure from Ta ble B25032, American Community Survey, 2012-2016. (3) Pers ons by units i n s tructure from Table B25033, American Community Survey, 2012-2016. (4) Vehi cle tri ps ends based on persons using formulas from Tri p Generation (ITE 2017). For single family housing (ITE 210), the fi tted curve equation i s EXP(0.89*LN(persons)+1.72). To a pproximate the a verage population of the ITE studies, pers ons were divided by 286 a nd the equation result multiplied by 286. For mul tifamily housing (ITE 221), the fitted curve equation is (2.29*persons)-81.02. (5) Vehi cle trip ends based on vehicles a vailable using formulas from Tri p Generation (ITE 2017). For single family housing (ITE 210), the fi tted curve equation is EXP(0.99*LN(vehicles)+1.93). To a pproximate the average number of vehicles in the ITE s tudies, vehicles available were divided by 485 a nd the equation result multiplied by 485. For multifamily housing (ITE 220), the fi tted curve equation i s (3.94*vehicles)+293.58 (ITE 2012). (6) Housing units from Table B25024, American Community Survey, 2012-2016. 11  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine Nonresidential Vehicle Trips Vehicle trip generation for nonresidential land uses are calculated by using ITE’s average daily trip end rates found in their recently published 10th edition of Trip Generation. To estimate the trip generation in Portland, the weekday trip end per 1,000 square feet factors highlighted in Figure 19 are used. To estimate the trip generation for retail the shopping center factor is used, for office the general office factor is used, for industrial the manufacturing factor is used, and for institutional the hospital factor is used. Figure 18. Institute of Transportation Engineers Nonresidential Land Use Factors ITE Demand Wkdy Trip Ends Wkdy Trip Ends Code Land Use Unit Per Dmd Unit Per Employee 110 Light Industrial 1,000 Sq Ft 4.96 3.05 130 Industrial Park 1,000 Sq Ft 3.37 2.91 140 Manufacturing 1,000 Sq Ft 3.93 2.47 150 Warehousing 1,000 Sq Ft 1.74 5.05 254 Assisted Living bed 2.60 4.24 320 Motel room 3.35 25.17 520 Elementary School 1,000 Sq Ft 19.52 21.00 530 High School 1,000 Sq Ft 14.07 22.25 540 Community College student 1.15 14.61 550 University/College student 1.56 8.89 565 Day Care student 4.09 21.38 610 Hospital 1,000 Sq Ft 10.72 3.79 620 Nursing Home 1,000 Sq Ft 6.64 2.91 710 General Office (avg size) 1,000 Sq Ft 9.74 3.28 760 Research & Dev Center 1,000 Sq Ft 11.26 3.29 770 Business Park 1,000 Sq Ft 12.44 4.04 820 Shopping Center (avg size) 1,000 Sq Ft 37.75 16.11 Source: Tri p Genera ti on, Ins ti tute of Tra ns porta ti on Engi neers , 10th Edi ti on (2017) Mode Share and Vehicle Occupancy Data from the National Household Travel Survey (NHTS) is used to approximate the percentage split of total person trips by transportation modes in the City of Portland. NHTS has been conducting stratified, random surveys for nearly 50 years with the aim to understand the modes and purposes of travel in the US. For this study, the most recent survey, 2017, is refined to create a database of survey responses that is both from similar cities to Portland and statistically significant. Initially, the national database of responses is refined by location and population, the results are limited to New England metropolitan statistical areas (ME, NH, VT, CT, MA, RI) with less than 1 million residents. The City of Portland is within the Portland-South Portland-Biddeford, Maine metropolitan statistical area that had a population of 523,874 in 2016 (US Census American Community Survey, 2016). The database is further filtered to only include responses from urban areas and urban clusters. Lastly, only responses for trips on weekdays are included. As a result, there are 2,656 NHTS responses in the database that are used to approximate the mode splits and vehicle occupancy. 12  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine Data from NHTS indicates the purpose of a trip which allows for the mode share and vehicle occupancy to be calculated for residential and nonresidential land uses separately. It is assumed that trips for residential and nonresidential purposes have different characteristics, so by calculating separately the analysis results in more accurate trip factors. There are 1,447 survey responses that are attributed to residential and 1,209 responses attributed to nonresidential land uses. Both databases are well within a 95 percent confidence level with a confidence interval (margin of error) of less than 3. 1 The transportation mode split for residential purpose trips is listed in Figure 20. Of the 1,447 total trips, 86 percent are by vehicle, 1 percent transit, and 13 percent non-motorized. Additionally, during the vehicle trips there were 1,877 passengers, resulting in an average vehicle occupancy of 1.51 passengers per vehicle trip. Figure 19. Residential Purpose Person Trips by Mode Mode Trips % Vehicle 1,246 86% Transit 18 1% Non-Motorized 183 13% Total 1,447 100% Source: National Household Travel Survey, 2017; TischlerBise analysis The transportation mode split for nonresidential purpose trips is listed in Figure 21. Of the 1,209 total trips, 82 percent are by vehicle, 2 percent transit, and 16 percent non-motorized. Additionally, during the vehicle trips there were 1,669 passengers, resulting in an average vehicle occupancy of 1.69 passengers per vehicle trip. Figure 20. Nonresidential Purpose Person Trips by Mode Mode Trips % Vehicle 989 82% Transit 22 2% Non-Motorized 198 16% Total 1,209 100% Source: National Household Travel Survey, 2017; TischlerBise analysis 1 A confidence level expresses the certainty that the true mean of the population falls within the confidence interval, the margin of error of the results. 13  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine Vehicle Trip Ends to Find Total Person Trip Ends The total person trip end rate for each land use can be calculated using the vehicle trip end rate, vehicle occupancy rate, and vehicle mode share. The following formula to calculate vehicle trip ends is provided in the ITE’s Trip Generation Handbook (2017): Vehicle trip ends = [(person trip ends x (vehicle mode share)]/(vehicle occupancy) This is rearranged to calculate total person trips: Person trip ends = [(vehicle trip ends) x (vehicle occupancy)]/(vehicle mode share) By inputting the vehicle trip rate, vehicle occupancy, and vehicle mode share factors found in earlier sections, the daily person trip rate for each land use is found. For example, the daily vehicle trip rate for a single family/duplex housing unit is 7.60 (Figure 18), the vehicle occupancy is 1.51, and the vehicle mode share is 86 percent (Figure 20). By inputting these factors into the formula, a daily person trip end rate of 13.34 is calculated ([7.60 vehicle trips x 1.51 occupancy rate] / [86% vehicle mode share] = 13.34). Figure 22 lists the calculated daily person trip end rate for each land use. Figure 21. Daily Person Trip End Rate by Land Use Daily Vehicle Vehicle Daily Vehicle Occupancy Mode Person Development Type Trip Ends Rate Share Trip Ends Single Family/Duplex 7.60 1.51 86% 13.34 Multifamily 3.60 1.51 86% 6.32 Retail 37.75 1.69 82% 77.80 Office 9.74 1.69 82% 20.07 Industrial 3.93 1.69 82% 8.10 Institutional 10.72 1.69 82% 22.09 Source: Tri p Genera ti on, Ins ti tute of Tra ns porta ti on Engi neers , 10th Edi ti on (2017); Na ti ona l Hous ehol d Tra vel Survey da ta , 2017; Ti s chl erBi s e a na l ys i s Residential Trips Adjustment Factors A person trip end is the out-bound or in-bound leg of a trip. As a result, so to not double count trips, a standard 50 percent adjustment is applied to trip ends to calculate a person trip. For example, the out- bound trip from a person’s home to work is attributed to the housing unit and the trip from work back home is attributed to the employer. However, an additional adjustment is necessary to capture residents’ work bound trips that are outside of the City. The trip adjustment factor includes two components. According to the NHTS (2009), home- based work trips are typically 31 percent of out-bound trips (which are 50 percent of all trip ends). Also, utilizing the most recent data from the Census Bureau's web application "OnTheMap”, 49 percent of the 14  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine City of Portland's workers travel outside the city for work. In combination, these factors account for 8 percent of additional production trips (0.50 x .31 x 0.49 = 0.08). Shown in, the total adjustment factor for residential housing units includes attraction trips (50 percent of trip ends) plus the journey-to-work commuting adjustment (8 percent of production trips) for a total of 58 percent. Figure 22. Trip Adjustment Factor for Commuters out of the City Employed Portland Residents (2015) 35,405 Portland Residents Working in the City (2015) 17,958 Portland Residents Commuting Outside of the City for Work 17,447 Percent Commuting out of the City 49% Additional Production Trips 8% Standard Trip Adjustment Factor 50% Residential Trip Adjustment Factor 58% Source: U.S. Cens us , OnTheMa p Appl i ca ti on, 2015 To calculate nonresidential trips, the standard 50 percent adjustment is applied to office, industrial, and institutional. A lower trip adjustment factor is used for retail uses because this type of development attracts person trips while they pass-by. Pass-by trips do not generate further traffic as it is only a stop on a trip for ultimately a different purpose. For example, when someone stops at a convenience store on their way home from work, the convenience store is not their primary destination. Person Trips by Mode In Figure 24, the trip adjustment factor and mode share are applied to the person trip end rate of each land use to calculate the person trips. For example, for single family/duplex housing units the trip adjustment factor is 58 percent and the vehicle mode share is 86 percent, resulting in a daily person trip rate of 6.66 for the vehicle mode (13.34 person trip ends x 0.58 trip adjustment factor x 0.86 vehicle mode share = 6.66 person trips). Figure 23. Person Trips by Mode Trip Person Trips/Unit Person Trip Adjustment Non- Development Type Ends Factor Total Vehicle Transit motorized Single Family/Duplex 13.34 58% 7.74 6.66 0.08 1.01 Multifamily 6.32 58% 3.67 3.16 0.04 0.48 Retail 77.80 38% 29.56 24.24 0.59 4.73 Office 20.07 50% 10.04 8.23 0.20 1.61 Industrial 8.10 50% 4.05 3.32 0.08 0.65 Institutional 22.09 50% 11.05 9.06 0.22 1.77 Source: Tri p Genera ti on, Ins ti tute of Tra ns porta ti on Engi neers , 10th Edi ti on (2017); Na ti ona l Hous ehol d Tra vel Survey da ta , 2017; Ti s chl erBi s e a na l ys i s Note: Tri p ra tes a re s hown per hous i ng uni t for res i denti a l l a nd us es a nd per 1,000 s qua re feet of fl oor a rea for nonres i denti a l l a nd us es . 15  DEMOGRAPHIC AND LAND USE ASSUMPTION MEMORANDUM Portland, Maine VEHICLE TRIP PROJECTION The base year person trip totals and trip projections are calculated by combining the person trip factors and the residential and nonresidential assumptions for housing stock and floor area. Found in Figure 25, in the base year, residential land uses generate 223,734 person trips (30 percent) and nonresidential land uses generate 511,437 person trips (70 percent) in the City of Portland. Through 2028, there will be an increase of 47,721 daily person trips in Portland with retail, multifamily, and office development being the three largest contributors to the increase. In the base year, 83 percent of the person trips are by vehicle, 2 percent is by transit, and 15 percent is by non-motorized modes. The majority of the person trip increase over the 10-year projection period is from vehicles as well. Figure 24. Total Daily Vehicle Trip Projections Base Year Total 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Residential Person Trips Single Family/Duplex 162,904 163,161 163,418 163,675 163,932 164,189 164,446 164,703 164,960 165,216 165,473 2,570 Multifamily 60,830 61,762 62,693 63,625 64,556 65,487 66,419 67,350 68,282 69,213 70,145 9,314 Subtotal 223,734 224,922 226,111 227,299 228,488 229,676 230,865 232,053 233,241 234,430 235,618 11,884 Nonresidential Person Trips Retail 290,177 291,864 293,551 295,238 296,925 298,612 300,299 301,987 303,674 305,361 307,048 16,871 Office 93,550 94,408 95,266 96,124 96,982 97,840 98,698 99,555 100,413 101,271 102,129 8,579 Industrial 29,260 29,520 29,781 30,041 30,302 30,562 30,823 31,083 31,344 31,604 31,865 2,605 Institutional 98,450 99,228 100,006 100,785 101,563 102,341 103,119 103,897 104,676 105,454 106,232 7,782 Subtotal 511,437 515,021 518,604 522,188 525,772 529,356 532,939 536,523 540,107 543,690 547,274 35,837 Grand Total Person Trips 735,171 739,943 744,715 749,487 754,260 759,032 763,804 768,576 773,348 778,120 782,892 47,721 Person Trips by Transportation Mode Total Vehicle Person Trips 611,790 615,750 619,711 623,672 627,632 631,593 635,554 639,514 643,475 647,436 651,396 39,607 Total Transit Person Trips 12,466 12,550 12,633 12,717 12,800 12,884 12,967 13,051 13,135 13,218 13,302 836 Total Non-Motorized Trips 110,915 111,643 112,371 113,099 113,827 114,555 115,283 116,011 116,738 117,466 118,194 7,279 Grand Total Person Trips 735,171 739,943 744,715 749,487 754,260 759,032 763,804 768,576 773,348 778,120 782,892 47,721 Source: Tri p Genera ti on, Ins ti tute of Tra ns porta ti on Engi neers , 10th Edi ti on (2017); Na ti ona l Hous ehol d Tra vel Survey da ta , 2017; Ti s chl erBi s e a na l ys i s 16  DEMOGRAPHIC AND LAND USE ASSUMPTION MEMORANDUM Portland, Maine BASE YEAR WASTEWATER USAGE Water and sewer account data has been provided by the Portland Water District (PWD) and the City’s Department of Public Works. Within the database, residential, commercial, industrial, and institutional wastewater usage is calculated. Additionally, with account data, the wastewater usage of an Equivalent Residential Unit (ERU) is calculated as well. The ERU is the estimate of the daily average wastewater usage from a household with a water meter that is 5/8 inches. In the impact fee calculation, a capacity ratio factor is applied when calculating the wastewater usage and resulting impact fee for developments with larger meters. Base Year Estimates Shown in Figure 26, on average there is a total of 5.7 million gallons per day of wastewater flowing through the City’s sewer system from these four development types. The majority of the wastewater flows from residential development, but commercial development creates a significant demand as well. Figure 25. City of Portland Daily Wastewater Usage, 2018 Base Year Development Type (gals/day) % Residential 2,933,364 52% Commercial 1,998,656 35% Industrial 542,244 10% Institutional 187,205 3% Total 5,661,470 100% Source: Ci ty of Portl a nd Publ i c Works Depa rtment Equivalent Residential Unit The wastewater component of the impact fee study will use the wastewater flow calculated for residential units that have a water meter of 5/8 inches to represent the Equivalent Residential Unit (ERU). To calculate the ERU, the wastewater account database is filtered by active residential accounts that use the City’s sewer system. Additionally, the database is further limited by only year-round accounts. These accounts are occupied households that reside in Portland permanently. Year-round accounts are approximated by accounts that have activity every month. Illustrated in Figure 27, there is an average of 61 hundred cubic feet (HCF) of wastewater per year from a year-round active residential account flowing into the City’s sewer system. That equates to an average of 126 gallons per day, rounded. 17  DRAFT DEMOGRAPHIC AND LAND USE ASSUMPTIONS MEMORANDUM Portland, Maine Figure 26. Equivalent Residential Unit Meter Size Total Water Active Annual Average per Annual Average Daily Average (inches) (HCF) Accounts Account (HCF) (gallons) (gallons) 5/8 866,230 14,134 61 45,846 126 Source: Ci ty of Portl a nd Publ i c Works Depa rtment; Ti s chl erBi s e a na l ys i s Note: Provi ded da ta mea s ured wa s tewa ter tota l s i n hundred cubi c feet (HCF), equa l to 748.05 ga l l ons WASTEWATER PROJECTIONS To project wastewater flows, is it assumed that the average consumptions will stay constant. As a result, the wastewater from residential accounts will increase at the same rate as the projected housing units and wastewater from nonresidential accounts will increase at the same rate as the projected growth in floor area for the respective industry. Over the next ten years, a total increase of 500,000 gallons per day is projected. Residential and commercial land uses account for the majority of the projected increase. Figure 27. Wastewater Projections, Million Gallons Per Day (MGD) Base Year Total Development Type 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Increase Residential 2.93 2.96 2.98 3.00 3.02 3.05 3.07 3.09 3.11 3.13 3.16 0.22 Commercial 2.00 2.02 2.04 2.06 2.08 2.10 2.12 2.14 2.16 2.18 2.20 0.20 Industrial 0.54 0.55 0.55 0.56 0.56 0.57 0.58 0.58 0.59 0.59 0.60 0.06 Institutional 0.19 0.19 0.19 0.19 0.19 0.20 0.20 0.20 0.20 0.20 0.21 0.02 Total 5.66 5.71 5.76 5.81 5.86 5.91 5.96 6.01 6.06 6.11 6.16 0.50 Source: Ci ty of Portl a nd Publ i c Works Depa rtment; Ti s chl erBi s e a na l ys i s 18 Attachment 7 September 2018 COLLIERS INTERNATIONAL 1  - September 2018 COLLIERS INTERNATIONAL 2 PORTLAND IMPACT FEE ANALYSIS SUMMARY 9/20/2018 DRAFT Office Multifamily Multifamily Suburban Shopping Downtown Hotel + Industrial Rental Condominium Airport Hotel Center Retail # of Residential Units 75 Units 50 Units # of Hotel Room Keys 150 Keys 200 Keys Office GSF 50,000 GSF Retail GSF 7,500 GSF 105,000 GSF Industrial GSF 50,000 GSF Surface Parking GSF 24,375 GSF 65,000 GSF 16,250 GSF 325,000 GSF Structured Parking GSF 16,250 GSF Development GSF (ex. Parking) 67,500 GSF 55,000 GSF 52,500 GSF 70,000 GSF 57,500 GSF 50,000 GSF 105,000 GSF Total Development Cost (Without Impact Fee) $21,133,704 $21,703,206 $22,765,606 $27,256,344 $20,132,086 $10,171,438 $39,873,038 $/Unit/Key/GFA (Without Impact Fee) $281,782.72/ Unit $434,064.12/ Unit $151,770.71/ Key $136,281.72/ Key $354.55/GSF $205.22/GSF $388.81/GSF Estimated Impact Fee to Developer $163,301 $118,926 $522,026 $685,976 $254,803 $89,738 $952,286 Percent of TDC 0.77% 0.55% 2.29% 2.52% 1.27% 0.88% 2.39% IRR (Without Impact Fee) 9.55% 11.60% 10.19% 10.95% 15.31% 9.04% 10.38% IRR (With Impact Fee) 9.38% 11.39% 9.63% 10.33% 14.91% 8.84% 9.83% Difference in IRR 0.17% 0.21% 0.56% 0.62% 0.40% 0.20% 0.55% ROI (Without Impact Fee) 4.18% 33.17% 5.85% 6.46% 9.72% 5.38% 6.27% ROI (With Impact Fee) 4.11% 32.43% 5.50% 6.01% 9.26% 5.26% 5.86% Difference in ROI 0.07% 0.74% 0.35% 0.45% 0.47% 0.12% 0.41% 9/20/2018 September 2018 COLLIERS INTERNATIONAL 3 September 2018 COLLIERS INTERNATIONAL 4 September 2018 COLLIERS INTERNATIONAL 5 September 2018 COLLIERS INTERNATIONAL 6 September 2018 COLLIERS INTERNATIONAL 7 September 2018 COLLIERS INTERNATIONAL 8 September 2018 COLLIERS INTERNATIONAL 9 September 2018 COLLIERS INTERNATIONAL 10 September 2018 COLLIERS INTERNATIONAL 11  Attachment 8 IMPACT FEES 13 IMPACT FEES by the Department of Permitting and Inspections with reference to the City of Portland’s most recent 13.1 AUTHORITY Impact Fee Study. If the proposed development is This ordinance is enacted pursuant to the authority of a type not listed in the impact fee schedule, then of 30-A M.R.S.A. § 4354 and 30-A M.R.S.A. § 3001. the impact fees applicable to the most nearly comparable type of land use listed in the impact fee 13.2 PURPOSE schedule shall be used. The purpose of these impact fee provisions is to ensure that new development in the City of 13.4.3 Mixed Use Development Portland bears a proportional or reasonably-related In the event that there is more than one principal share of the cost of new, expanded, or replacement use within a building, impact fees shall be calculated infrastructure necessary to service that separately for each principal use. development through: 1. The payment of impact fees dedicated to 13.4.4 Redevelopment funding improvements made necessary by In calculating the impact fee for a new building that development, or involves the full or partial demolition of a building 2. The construction of improvements as housing an existing, legally established use or uses, provided for herein. such new building shall be credited with an amount equal to the fee that would have been charged to 13.3 APPLICABILITY the use or uses which occupied the structure at the The following shall be subject to impact fees: time of demolition permit. If the impact fee 1. Any new building or addition to existing calculation for the post-development condition is buildings which results in net new greater than the credit, the applicant shall pay the residential dwelling units, non-residential difference. If the impact fee calculation for the building square footage, or post-development condition is less than the credit, water/wastewater meters, and then the applicant shall not be required to pay an 2. Any change of use which results in a net impact fee. The City shall not grant credits for increase in impact fee per Section 13.4.6. demolitions not associated with new development or demolitions for which a permit was issued more 13.4 CALCULATION OF IMPACT FEE than 12 months prior to the complete application 13.4.1 In General for a building permit. Impact fees shall be calculated based on the impact fee schedule in effect at the time of submittal of a 13.4.5 Building Additions complete application for a building permit. In calculating the impact fee for building additions, each developed property shall be credited with an 13.4.2 Determination of Use amount equal to the fee that would have been The determination of the applicable land use charged to the existing use at the time of the category in the impact fee schedule shall be made addition of floor area. If the impact fee calculation CITY OF PORTLAND LAND USE CODE | 1 IMPACT FEES for the post-development condition is greater than application for building permit. If the impact fee the credit, the applicant shall pay the difference. If calculation for the proposed use is greater than the the impact fee calculation for the post-development credit, the applicant shall pay the difference. If the condition is less than the credit, then the applicant impact fee calculation for the proposed use is less shall not be required to pay an impact fee. than the credit, then the applicant shall not be required to pay an impact fee. The City shall not 13.4.6 Changes of Use grant credits for uses which have been discontinued In calculating the impact fee for changes of use, for a period of 12 months or more prior to the each developed property shall be credited with an complete application for a building permit. amount equal to the fee that would have been charged to the existing use at the time of TABLE 13.1: PARKS & RECREATION AND TRANSPORTATION IMPACT FEE SCHEDULE1 Land Use Type Unit of Measure Parks/Recreation Impact Fee Transportation Impact Fee Single-family/Two-family per unit $1,126 $2,159 Multi-family (3+ units) per unit $752 $1,023 Retail/Service per 1,000 SF GFA $534 $8,248 Office per 1,000 SF GFA $677 $2,800 Institutional per 1,000 SF GFA $363 $1,130 Industrial per 1,000 SF GFA $645 $3,082 Hotel per room $875 $2,404 1 Land use types included in the impact fee schedule correspond to those in the city’s most recent Impact Fee Study. TABLE 13.2: WASTEWATER IMPACT FEE SCHEDULE Meter Size Capacity Ratio Impact Fee 5/ 8 inch 1.00 $1,886 ¾ inch 1.50 $2,829 1 inch 2.50 $4,715 1 ½ inches 5.00 $9,430 2 inches 8.00 $15,088 3 inches 16.00 $30,176 6 inches 50.00 $94,300 8 inches 80.00 $150,880 2 | CITY OF PORTLAND LAND USE CODE Draft 9/28/18  IMPACT FEES 13.5 ANNUAL ADJUSTMENT OF IMPACT FEE approval by the City or a state or To account for inflation, there shall be an automatic federal agency, to make or to pay for annual increase in the impact fee schedule reflected infrastructure improvements for in this ordinance every January 1 based on the which the impact fee would be change in the construction cost index as published collected or an equivalent by Engineering News Record. The fee adjustment improvement approved by the shall be calculated by dividing the index amount Planning Board or Planning Authority. published on January 1 of the current year by the index amount published on January 1, 2018 and Credit amounts shall be determined based multiplying the resulting ratio by each fee amount. on plans, details, and cost estimates for the Annual adjustments shall be made available for proposed infrastructure improvements for public reference. which the credit is requested. Such plans, details, and cost estimates shall be 13.6 MODIFICATION OF IMPACT FEES prepared by a licensed professional A required impact fee may be waived, in whole or in engineer and submitted at the time of site part, by formal vote of the Planning Board in cases plan, subdivision, or building permit when an applicant is otherwise before the Planning application. The applicant shall pay for any Board, or by the Planning Authority in all other third-party review of plans, details, or cost cases, as follows: estimates. On-site or immediately adjacent A. Any site plan, subdivision, or building improvements required under subdivision permit applicant may request a credit or site plan regulations shall not be against impact fees otherwise due, up to considered eligible under this section. but not exceeding the full obligation of impact fees to be paid pursuant to the B. Any site plan, subdivision, or building provisions of this chapter, in the following permit applicant may request a instances: modification of impact fees, up to but not 1. The developer or property owner who exceeding the full obligation of impact fees would otherwise be responsible for to be paid pursuant to the provisions of the payment of the impact fee this chapter, where documentation is voluntarily agrees to make provided to demonstrate that a proposed infrastructure improvements for use will impose no or substantially-reduced which the impact fee would be demands on capital facilities for which collected or an equivalent impact fees have been adopted. Such improvement approved by the documentation shall be prepared by a Planning Board or Planning Authority, licensed professional engineer and include or a written analysis of the demand for capital 2. The developer or property owner is facilities generated by the proposed use required, as part of a development based on industry standards and the most CITY OF PORTLAND LAND USE CODE | 3 IMPACT FEES recent Impact Fee Study. Documentation improvements which the City Council, through the shall be submitted at the time of site plan, City of Portland’s most recent Impact Fee Study, has subdivision, or building permit application. determined are made necessary by new The applicant shall pay for any third-party development. The City Council has determined that review of plans, details, or cost estimates fees imposed by schedules in this ordinance are reasonably related to the demands created by new 13.7 REDUCTION IN FEES FOR AFFORDABLE development. Impact fees collected pursuant to this HOUSING ordinance shall be used exclusively for capital Any residential development including low-income improvements, and the City of Portland shall expend or workforce housing units and qualifying as an funds collected from impact fees solely for the eligible project under Division 30 shall receive a purposes for which they were collected. reduction of fees in accordance with Section 14- 486. 13.11 REFUND OF UNUSED IMPACT FEES Impact fees collected pursuant to this ordinance 13.8 COLLECTION OF IMPACT FEE shall be used by the City according to the schedules The City of Portland shall not issue any certificate of for the completion of specific capital improvements occupancy required under the Land Use Code until as specified in the City of Portland’s most recent the applicant has paid any impact fees required by Impact Fee Study, but in no event later than ten years this ordinance. after the date upon which the impact fee was collected. Any impact fees which are not so used and 13.9 SEGREGATION OF IMPACT FEES FROM any impact fees collected which exceed the City’s GENERAL REVENUES actual costs of implementing the infrastructure Impact fees collected pursuant to this ordinance improvements for which such fees were collected shall be maintained in separate, non-lapsing impact shall be refunded. Refunds shall be paid to the owner fee accounts for each of the facilities for which of record of the property for which the impact fee impact fees are assessed, and shall be segregated was collected, determined as of the date the refund from the City’s general revenues. These accounts is made. shall be dedicated for funding of the improvements for which the fee is collected, as determined 13.12 REVIEW AND REVISION through the City’s most recent Impact Fee Study. The impact fees established in this ordinance are Funds from these accounts shall be distributed to based upon the best estimates of the costs of the City departments solely for the purpose of capital construction of the facilities for which the fees are projects identified in the City of Portland’s most collected as determined through the City’s most recent Impact Fee Study. recent Impact Fee Study. The Council may, by amendments to this ordinance, change the amounts 13.10 USE OF IMPACT FEES of the impact fees from time to time as warranted by Impact fees collected by the City pursuant to this new information or changed circumstances. ordinance may be used only for financing facility 4 | CITY OF PORTLAND LAND USE CODE Draft 9/28/18  Attachment 9 Proposed Amendments to Division 30 DIVISION 30. AFFORDABLE HOUSING ... Sec. 14-485. Definitions. ... Development fees means: (a) The following fees, as described in this chapter: site plan review and inspection fees; subdivision review and inspection fees; impact fees; and administrative fees; and (b) Construction and permit fees as described in Chapter 6. “Development fees” does not include any fees charged for reviews conducted by a party other than the city. 9/20/2018 City of Portland Mail - Impact fees for parking garages? Attachment 10 Helen Donaldson <hcd@portlandmaine.gov> Impact fees for parking garages? Christian MilNeil <c.neal.milneil@gmail.com> Wed, Sep 19, 2018 at 3:55 PM To: hcd@portlandmaine.gov Cc: Jeff Levine <jlevine@portlandmaine.gov>, planningboard@portlandmaine.gov Thanks Nell, I understand where you are coming from w/r/t not charging impact fees to new parking garages, but I don't agree with the reasoning. Parking garages are a land use and they are almost always subsidized – and subsidies for automobile use naturally generate more automobile trips. We know intuitively and by observation that a 7-11 surrounded by a big, free parking lot generates more car traffic than a Rosemont Market, even though the square footages are roughly the same and the buildings' uses, from a zoning standpoint, are identical. The Bangor Savings Bank branch on Middle Street is the same land use as the Bangor Savings Bank branch on outer Brighton Avenue, but the Old Port location has virtually no impact to traffic because there is no parking there and it's been designed for walk-in traffic; the Brighton location does have a traffic impact because it's designed to privilege access for motorists. We drive to the Maine Mall because it's surrounded by parking lots, and we walk to Reny's because parking is scarce on Congress Street and the pedestrian and transit connections are excellent. The planning department needs to bear in mind that impact fees have an important function beyond financing infrastructure projects: ideally, they could also offer a financial incentive for developers to reduce the impact of their projects; to build fewer parking lots and more transit-oriented, walkable neighborhoods where cars don't get used as much. In its current form, the proposed ordinance will make smart growth even more expensive, and more development will go out to Westbrook and Scarborough instead, and we'll end up back at square one, with increasing traffic and none of the money we need to deal with it. So, instead of assuming that every housing development is going to generate car traffic with a one-size-fits-all approach we have here, we could have a tiered system of impact fees such that a car-oriented development with lots of parking pays more, and a transit-oriented development that gives its tenants bus passes pays less (or not at all), and thus give developers a financial incentive to build more of the latter. The city already acknowledges, through its transportation demand management policies, that developers can and do reduce their traffic impacts with project design and property management strategies; the prior use of TDM plans undermines the city's argument that traffic impacts are a blind function of land use multiplied by the dreary transportation mode shares of our status quo. In fact, developers' TDM plans themselves could be used as a better proxy for a development's traffic impacts, since the TDM plans explicitly set a developer's expectations for how their tenants will travel, and how much they will subsidize parking. From a political point of view, a lot of Portlanders are upset about how much parking garage construction is happening right now downtown. It's a clear, visible demonstration of how the city and landlords are willing to spend lots of money to subsidize private parking, even as the city's public streets strain under increasing traffic congestion. This is a clear "tragedy of the commons" situation – every new parking space makes driving slightly more convenient for one motorist but incrementally increases congestion for everyone else – that demands a stronger public policy response. Impact fees would be a good place to start: a financial nudge to encourage developers to internalize the broader traffic impacts of their parking management decisions. I'd appreciate it if you could share this message with the planning board as public comment tomorrow; I may try to attend the meeting in person as well. A couple of other more technical points: Figure 24 in the memo seems to assume that the mode share for transit, walking and biking will remain constant (and miserably low) through 2028. Don't we have city goals that say we want more transit market share, and less motor vehicle use over time? Isn't shifting mode share the point of many of these infrastructure projects we want to fund? It's discouraging to see a city planning document assume failure in those ambitions, which some of us https://mail.google.com/mail/u/0/?ui=2&ik=f75a4d2e64&jsver=HaWAij9wtf4.en.&cbl=gmail_fe_180911.11_p4&view=pt&msg=165f367570b59307&sear… 1/2 9/20/2018 City of Portland Mail - Impact fees for parking garages? consider pretty important! Mode share estimates in Table 19 seem to come from the FHWA's Household Travel Survey (https://nhts.ornl.gov/). We should be skeptical of those figures; that survey has a very small sample size (only 250 respondents from the entire state of Maine – source) that likely discounts Portland's uniquely high transit service and walkability relative to other small cities. The U.S. Census Bureau's American Community Survey, by contrast, surveyed 15,423 households in Maine in its 2017 survey, so it's much, much more robust. The ACS estimates that Portland's citywide transit mode share for commuting trips is 3.2% – twice as high as TischlerBise's assumed mode share, and transit ridership is growing. Furthermore, we know from Census tract-level estimates that mode share also varies by neighborhood, significantly. Bayside (in Census Tract 6) has a transit mode share of 9.9% and a walk/bike share of 40% for commuting trips. By the logic of this memo, a project located in Bayside should pay a significantly lower impact fee than a project located in Riverton if we use the more reliable, more statistically robust ACS data. Christian MilNeil ------------- double u double u double u dot christianmilneil dot com [Quoted text hidden] [Quoted text hidden] Notice: Under Maine law, documents - including e-mails - in the possession of public officials or city employees about government business may be classified as public records. There are very few exceptions. As a result, please be advised that what is written in an e-mail could be released to the public and/or the media if requested. https://mail.google.com/mail/u/0/?ui=2&ik=f75a4d2e64&jsver=HaWAij9wtf4.en.&cbl=gmail_fe_180911.11_p4&view=pt&msg=165f367570b59307&sear… 2/2 9/27/2018 City of Portland Mail - Impact fee ordinance concerns Helen Donaldson <hcd@portlandmaine.gov> Impact fee ordinance concerns Christian MilNeil <c.neal.milneil@gmail.com> Mon, Sep 24, 2018 at 3:17 PM To: Ethan Strimling <estrimling@portlandmaine.gov>, Belinda Ray <bsr@portlandmaine.gov>, sthibodeau@portlandmaine.gov, Brian Batson <bbatson@portlandmaine.gov>, jcosta@portlandmaine.gov, Kim Cook <kcook@portlandmaine.gov>, Pious Ali <pali@portlandmaine.gov>, Nick Mavodones <nmm@portlandmaine.gov>, Jill Duson <jduson@portlandmaine.gov> Cc: "PBPAC@googlegroups.com" <pbpac@googlegroups.com>, HCD@portlandmaine.gov, Stuart O Brien <sgo@portlandmaine.gov> Mayor Strimling and honorable city councilors, A lot of Portlanders are distressed about how much parking garage construction is happening right now downtown (with thousands of additional parking spaces in the planning pipeline). These new garages are a concrete demonstration of how the city if failing in its transportation and climate goals. Landlords are willing to spend lots of money to subsidize private parking, even as the city's public streets strain under increasing congestion. It's a classic "tragedy of the commons" situation – every new parking space makes driving slightly more convenient for one motorist but incrementally increases congestion for everyone else – and it demands a stronger public policy response from the city. Transportation impact fees could be an excellent way to tackle this issue: a financial nudge to encourage developers to internalize the broader traffic impacts of their parking management decisions. However, in the current proposal drafted by the city's planning department, new parking garages will get a free ride. We know intuitively and by observation that a 7-11 surrounded by a big, free parking lot generates more car traffic, while a new Rosemont Market makes more walking trips possible – even though the square footages are roughly the same and the buildings' uses, from a zoning standpoint, are identical. We drive to the Maine Mall because it's surrounded by free parking lots, and we walk to Reny's because parking is scarce on Congress Street and the pedestrian and transit connections are excellent. These examples demonstrate that, if we want to manage the impacts of traffic from new development, we need to incentivize useful infill development that makes car trips less necessary, and we need to discourage subsidized parking. The current draft impact fee ordinance does the opposite. There's also a real financial risk to the city in giving parking garages a free pass. Under state law, by adopting the ordinance, the city is committing to build these capital projects whether or not the anticipated growth occurs. In its current form, the proposed ordinance will make smart infill growth even more expensive, and thus even more development will sprawl out to cheaper suburbs like Westbrook and Scarborough instead. If Portland builds more parking garages downtown and spends millions of dollars to increase road network capacity through these capital projects, we run the risk of getting all of the traffic from new suburban development, but not having sufficient new revenue from new in-town housing and offices to pay for it. By expanding the proposed fees to cover parking garages as well, smarter infill growth becomes more financially attractive and the city can mitigate this financial risk. Future developers will have a financial incentive to build lower ratios of parking to usable space, and encourage more of their tenants to walk, ride bikes or patronize our underutilized buses. In short, there's an opportunity here for the city to collect fees from a broader base of new development, while also establishing financial incentives that are aligned with the city's goals. I also want to stress that I'm very glad the city is looking into the impact fees generally – I think it's an important tool for us to have in place. I'm just particularly concerned about the unintended effects of a parking garage loophole. Thanks for your attention and your work on this. https://mail.google.com/mail/u/0?ik=f75a4d2e64&view=pt&search=all&permmsgid=msg-f%3A1612517674317442162&simpl=msg-f%3A16125176743… 1/2 9/27/2018 City of Portland Mail - Impact fee ordinance concerns Christian MilNeil 45 Smith Street ------------- double u double u double u dot christianmilneil dot com https://mail.google.com/mail/u/0?ik=f75a4d2e64&view=pt&search=all&permmsgid=msg-f%3A1612517674317442162&simpl=msg-f%3A16125176743… 2/2 9/27/2018 City of Portland Mail - Impact fee ordinance concerns Helen Donaldson <hcd@portlandmaine.gov> Impact fee ordinance concerns Zack Barowitz <zbarowitz@gmail.com> Mon, Sep 24, 2018 at 3:30 PM To: Portland Bicycle-Pedestrian Advisory Committee <PBPAC@googlegroups.com> Cc: Mayor <estrimling@portlandmaine.gov>, Belinda Ray <bsr@portlandmaine.gov>, Spencer Thibodeau <sthibodeau@portlandmaine.gov>, Brian Batson <bbatson@portlandmaine.gov>, Justin Costa <jcosta@portlandmaine.gov>, Kim Cook <kcook@portlandmaine.gov>, Pious Ali At Large <pali@portlandmaine.gov>, Nicholas Mavodones <nmm@portlandmaine.gov>, Jill Duson <jduson@portlandmaine.gov>, Helen Donaldson <HCD@portlandmaine.gov>, Stuart O'Brien <sgo@portlandmaine.gov> Pursant to Christian's large point (e.g., "These examples demonstrate that, if we want to manage the impacts of traffic from new development, we need to incentivize useful infill development that makes car trips less necessary, and we need to discourage subsidized parking.") Urban density makes Land values and tax revenue are far greater in downtown Portland than in surrounding suburbs even if annual square foot rents are roughly equal. See this for example. Thanks, Zack [Quoted text hidden] [Quoted text hidden] -- You received this message because you are subscribed to the Google Groups "Portland Bicycle and Pedestrian Advisory Committee" group. To unsubscribe from this group and stop receiving emails from it, send an email to PBPAC+unsubscribe@ googlegroups.com. To post to this group, send email to PBPAC@googlegroups.com. For more options, visit https://groups.google.com/d/optout. -- 207-838-6120 917-696-5649 ZacharyBarowitz.com ATTENTION: The information in this electronic mail message is private and confidential, and only intended for the addressee. Should you receive this message by mistake, you are hereby notified that any disclosure, reproduction, distribution or use of this message is strictly prohibited. Please inform the sender by reply transmission and delete the message without copying or opening it. https://mail.google.com/mail/u/0?ik=f75a4d2e64&view=pt&search=all&permmsgid=msg-f%3A1612518489986796581&simpl=msg-f%3A16125184899… 1/1  Attachment 11 MEMORANDUM DISTRIBUTE TO: Members of the Economic Development Committee FROM: Brendan T. O’Connell - Finance Director Chris Huff - Assessor DATE: August 12, 2018 SUBJECT: Impact Fee - Questions and Answers from Finance Director & Assessor Several questions have been passed along from the Planning and Urban Development Department on behalf of residents and businesses in regards to impact fees, the existing tax levy and City budget, property valuation growth and the upcoming revaluation, and building permit fees and stormwater service charges. This memo is intended to summarize responses to many of the frequently asked questions (“FAQ”). Frequently Asked Impact Fee Questions for Finance and Assessors 1. I read the FY19 budget includes $100M of new estimated valuation and I know property values continue to grow. Why are my impact fees necessary during a time when there is so much new value in the City of Portland? Isn’t the existing growth enough to cover all City needs? 2. Will the upcoming revaluation help alleviate budget pressure and provide more tax dollars for City needs? 3. Building permit fees were increased recently. Wasn’t this increase intended to fund some of the same things impact fees are intended to fund (i.e. growth related infrastructure)? 4. What about the Stormwater Service Charge? Was that created in response to growth-related infrastructure needs? 1 Question 1: I read the FY19 budget includes $100M of new estimated valuation and I know property values continue to grow. Why are my impact fees necessary during a time when there is so much new value in the City of Portland? Isn’t the existing growth enough to cover all City needs? Property valuation has grown by $100 million in the current year due to significant new projects breaking ground and continues our upward trajectory in overall valuation. This $100 million of new property valuation creates an additional approximately $1,133,000 in tax revenue for municipal use. While this may seem like a significant amount, it represents only a 0.128% overall increase to our FY18 valuation of approximately $7.8 billion, and can only fund a fraction of the cost increases and budget challenges we face in FY19, many of which are outside of City control. These include the increases in Cumberland County tax ($381k), increases in pension obligation bond debt service ($872k and increasing by around $1M annually through 2026), contractually obligated union compensation increases (approximately $3.2M) and health insurance cost increases ($2M). As you can see, the increase in valuation can only fund a fraction of the cost increases that are outside of City control. Question 2: Will the upcoming revaluation help alleviate budget pressure and provide more tax dollars for the City needs? Staff Response: No – the revaluation has no impact on total funds collected for the budget. Each year the City Manager will recommend a budget, calling for the required amount of tax dollars to be levied on property owners. The revaluation will have no impact on the dollar amount levied – the total amount of tax dollars required for City / School operations will be the same both before and after the revaluation. The revaluation will only impact how the dollars levied are split between City taxpayers. In general about 1/3 of the residents will pay more after the revaluation, 1/3 of the residents will pay the same amount, and 1/3 of the residents will pay less, but in total the amount of tax dollars collected will remain the same. When property values rise overall as a result of the revaluation, the mil rate will see a corresponding drop. For example, if total City property value increased 25% during the revaluation from $8B to $10B as a result of the revaluation (i.e. adjusting property values to their just values) the mil rate would then see a corresponding 25% percentage decrease. EXAMPLE: Pre-City Revaluation: Total City Valuation: $8,000,000,000 Mil Rate: $20.00 Total Tax Levy Needed for City/School Operations: $160,000,000 ($8,000,000,000 / 1000 * $20.00) Post-City Revaluation: Total City Valuation: $10,000,000,000 Mil Rate: $16.00 (drops because we still only need a tax levy of $160,000,000) Total Tax Levy Needed for City/School Operations: $160,000,000 ($10,000,000,000 / 1000 * $16.00) 2 Question 3: Building permit fees were increased recently. Wasn’t this increase intended to fund some of the same things impact fees are intended to fund (i.e. growth related infrastructure)? Staff Response: In 2017 a separate Permitting & Inspections Department was created. The new Department was created in direct response to the 2016 City Council goal to create a more efficient permitting process, including online functionality. This new Department including significant levels new staff and a new Department Head, a new software system (EnerGov) and new policies and procedures, was funded by an increase in Building Permit fees. No part of the previous increase in building permit fees was intended to fund growth-related infrastructure. Additionally, there are no excess building permit revenues available to address growth-related infrastructure. Question 4: What about the Stormwater Service Charge? Was that created in response to growth-related infrastructure needs? Staff Response: No. The Stormwater Service Charge was created to fund and implement projects related to the Department of Environmental Protection (“DEP”) mandate for combined sewer overflow requirements. Instituting a stormwater charge more fairly and equitably distributes costs among the users of the sewer and stormwater systems rather than putting the burden entirely on sewer users. Stormwater service charges will raise approximately $7M towards the DEP mandate in FY19. The City estimates between $20M and $30M will be spent annually over the next 5-10 years to address the DEP mandate (revenues from both sewer fees and stormwater service charges will support this effort). There will be no excess of either Stormwater Service Charges or Sewer Fees to address growth related infrastructure needs. 3  Finance Department Brendan T O’Connell, Director MEMORANDUM TO: Members of the Economic Development Committee FROM: Brendan T O’Connell, CPA – Finance Director DATE: November 14, 2017 (updated September 28, 2018) SUBJECT: Introduction to Payment in-lieu of Taxes (PILOT) Policy (A) Summary One of the Economic Development Committee Goals for 2017 was to study a new payment in- lieu of taxes (“PILOT”) policy for the City of Portland. Staff researched PILOT policy types and alternatives and presented them to the Economic Development Committee on September 5. Input was taken at two subsequent Economic Development Committee meetings in 2017 and 2018. The revised PILOT policy takes into account the community benefits provided by each exempt organization and includes guidance for City staff on opportunities to solicit participation in the PILOT. (B) Background: Currently Exempt Property in Portland and Current PILOT Practice According to the City Tax Assessor, the amount of tax exempt real estate within the City of Portland has risen to approximately $2 billion dollars as of June 30, 2018 and this amount may be understated. This represents nearly 21% of the total City valuation. Even after deducting the total valuation related to City owned property (approximately 4% of overall total) the remaining exempt property represents a very high percentage when compared to other municipalities nationwide (see Exhibit A). The rise in exempt valuation has put increasing pressure on the remaining property owners (referred to hereafter as “non-exempt property” owners) to fully fund the broad spectrum of services offered to residents and visitors to Portland. The City currently has no formal PILOT policy. Agreements are negotiated with exempt property owners on very limited case by case basis, with little to no solicitation of new or extended PILOT agreements. The PILOT agreements and payments are typically negotiated to offset the cost of “basic” services in the City, loosely defined as public safety services and core Page 1 public works services. Currently 10 formal PILOT request letters are sent to nonprofit organizations annually, with a very limited number of other agreements in place with other non- exempt property owners. In total $570,000 of revenue was estimated within the FY18 budget from PILOT payments. Actual collections in FY17 were slightly higher than budgeted, due in part to certain PILOT agreements based on profits. It is important to note that nationwide there are no laws which require PILOT payments. The current City PILOT payments are voluntary and any future PILOT payments or agreements would remain voluntary. (C) Goals of the PILOT Policy As noted by the Lincoln Institute of Land Policy, PILOTs are a tool to address two problems with the property tax exemption provided to nonprofits. First, the exemption is poorly targeted, since it mainly benefits nonprofits with the most valuable property holdings, rather than those providing the greatest public benefits. Second, a geographic mismatch often exists between the costs and benefits of the property tax exemption, since the cost of the exemption in terms of forgone tax revenue is borne by the municipality in which a nonprofit is located, but the public benefits provided by the nonprofit often extend to the rest of the state or even the whole nation.1 PILOT policies are becoming an increasingly common way to solicit contributions from nonprofits to help offset the cost of services they consume. See Exhibit A on page 4 for a nationwide comparison of charitable nonprofit organizations registered with the IRS by type as well as their assets and liabilities. The PILOT policy will have several goals and objectives. Above all, a uniform policy must be developed to be applied to the exempt properties within the City. A PILOT policy would provide clarity to exempt organizations who wish to locate in Portland and create a more even playing field within exempt property owners. An added benefit will be a more equitable distribution of cost of services between exempt and non-exempt property owners, although actual increases in property tax revenues from formal PILOT policies vary significantly from municipality to municipality. As part of this uniform policy, guidelines for City staff may be included. For example, when a nonprofit expands holdings within the City, there should be protocol for initiation of a conversation around PILOT payments to offset the cost of conversion of non-exempt property to exempt property. This was recently done by the Planning Department when approving a recent development which included exempt property. A secondary goal of the PILOT will be to review the population of exempt properties in more detail, to fully understand the organizations receiving the most value from their exemptions. It is best practice to review the benefits provided by exempt organizations during PILOT policy development. An annual report on the approved PILOT policy and program would be completed on an annual basis, highlighting the organizations with exempt property value over $2M and the 1 Kenyon and Langley - Payments in Lieu of Taxes - Balancing Municipal and Nonprofit Interests, 2010 Page 2 contributions made to the City, including services in lieu of taxes and payments in lieu of taxes. (D) Arguments for Strong PILOT Policy  With an increasing percentage of exempt property within City, nonprofits should share in the cost of basic services which benefit them. Police and fire protection and road maintenance are the costs most frequently allocated to exempt property owners in other municipalities.  A strong PILOT policy has the potential to help ease the tax burden on non-exempt property owners, and create a more equitable distribution of the tax levy across those who consume core City services.  PILOT policies can help address inequities created by the charitable tax exemption (i.e. the greatest tax savings goes to organizations who have the most valuable property holdings).  PILOT policies can reduce inefficient location decisions made by nonprofits (i.e. exempt status creates an incentive for nonprofits to locate in cities where the tax savings are higher). Page 3 Exhibit A Page 4  Appendix A - FY19 Organizations with Exempt Value Ownership over $2M Maine Medical Center $ 266,183,320 Portland Housing Authority $ 58,908,580 Eco Maine $ 56,604,310 Mercy Hospital $ 45,209,960 University of New England $ 38,351,400 MMC Realty Corp. $ 27,894,220 Roman Catholic Bishop of Portland $ 26,370,840 Portland Museum of Art $ 20,637,080 JHA Assisted Living, Inc. $ 18,569,700 Maine College of Art $ 14,971,220 Waynflete School $ 14,402,000 State Street Housing Preservation Corp. $ 13,715,100 The Park-Danforth $ 12,828,400 St. Ignatius Residence of the Society of Jesus $ 11,236,700 Diocesan Bureau of Housing $ 10,816,800 HFA HUD Properties, LLC $ 10,205,500 Council International Study Programs $ 8,873,400 Home for Aged Women $ 8,798,450 Home for the Aged $ 8,454,700 Cedars Nursing Care Center Inc. $ 7,766,500 Shalom House, Inc. $ 7,763,750 The Salvation Army $ 6,901,990 Maine Health $ 6,821,400 Greater Portland Transit District $ 6,810,000 Young Men's Christian Association of Portland $ 6,601,400 Avesta Housing $ 6,409,600 St. Joseph's Manor $ 6,033,800 Gulph of Maine Research Institute $ 6,026,900 Masonic Trustees of Portland $ 4,866,900 Portland VOA Elderly Housing, Inc. $ 4,461,400 Spurwink Services $ 3,990,280 First Baptist Church $ 3,866,000 Jewish Community Alliance of Southern Maine $ 3,862,300 Gulph of Maine Properties $ 3,798,420 Preble Street Resource Center $ 3,551,300 Breakwater School $ 3,522,400 Maine Historical Society $ 3,487,900 St. Lukes Parish Wardens & Vestrymen $ 3,443,100 Portland Boys Club Assoc. $ 3,291,200 Children's Museum of Maine $ 3,207,300 Temple Beth-El $ 3,100,100 EMC Affordable Housing Preservation $ 3,017,100 Grace Baptist Church $ 2,874,260 Woodfords Congregational Church $ 2,805,560 Goodwill Industries of Northern New England $ 2,444,000 State Street Congregational Church $ 2,355,100 American Red Cross $ 2,319,400 Irish Heritage Center $ 2,296,100 Williston-Immanuel United Church $ 2,289,730 Florence House Housing Corp. $ 2,283,100 Bayside II LLC $ 2,165,200 The Iris Network $ 2,133,200 $ 809,598,370  CITY OF PORTLAND, MAINE PAYMENT IN LIEU OF TAXES POLICY (PILOT) Revised: September 28, 2018 Effective: January 1, 2019 Table of Contents 1. PURPOSE ................................................................................................................................................... 1 2. THE NEED FOR A FORMAL PILOT POLICY ................................................................................................. 1 3. FIVE BASIC PRINCIPLES OF THE PILOT POLICY ......................................................................................... 3 4. IS THE PILOT POLICY APPLICABLE TO MY ORGANIZATION? ................................................................... 5 5. CALCULATION OF PILOT PAYMENT DUE .................................................................................................. 5 6. SERVICES IN LIEU OF TAXES (SILOT) CREDIT ............................................................................................ 6 7. ANNUAL BILLING AND FIVE-YEAR PHASE IN (FY20-FY24) ....................................................................... 8 8. GUIDANCE FOR CITY STAFF – ENCOURAGING PARTICIPATION IN THE PILOT PROGRAM AND ANNUAL REPORTING ON PILOT .................................................................................................................................. 9 City of Portland Payment in Lieu of Taxes Policy (PILOT) 1. PURPOSE In order to maintain the high standard of municipal services that Portland has historically provided, the City Council has established a policy for PILOT (Payment In Lieu of Tax) contributions from tax-exempt property owners (referred to hereafter as “exempt property” owners). The purpose of this PILOT policy document is to summarize the uniform policy to be applied to the exempt properties within the City. The policy is intended to provide clarity to exempt organizations who wish to locate in Portland. The policy includes monetary payments and consideration of other services provided by exempt organizations. The policy also provides guidance for City staff when approached with questions about PILOT policy requirements. 2. THE NEED FOR A FORMAL PILOT POLICY According to the City Tax Assessor, the amount of tax exempt real estate within the City of Portland has risen to approximately $2 billion dollars as of June 30, 2017 and this amount may be understated. This represents nearly 21% of the total City valuation, a very high percentage when compared to other municipalities. The rise in exempt valuation has put increasing pressure on the remaining property owners in Portland (referred to hereafter as “non-exempt property” owners) to fully fund the broad spectrum of services offered to residents and visitors to Portland. The City recognizes that non-profit organizations contribute directly to the quality of life within the community and welcomes these organizations. Portland has historically been recognized as leader in Maine the area of higher education, arts and culture, public health and religious freedom, and have encouraged non-profits to organize in the City to enrich the quality of life of its residents. The City’s location, status as the economic engine of Northern New England, located just under 2 hours north of Boston, with easy access via major highway, bus, rail, and jetport, makes it attractive for non-profit institutions. This demand for land and buildings to operate non-profit organizations has absorbed significant amounts of taxable property within Revised: September 28, 2018 Page 1 City of Portland Payment in Lieu of Taxes Policy (PILOT) the City in recent years. A continuing shift in tax burden to a diminishing tax base will have a negative impact on residents, local businesses and the overall Greater Portland community. In order to maintain the financial health of the community as a whole and to as to continue to provide a range of quality services, the City must set an objective to maintain its existing tax base and expand it where reasonably possible. Strong PILOT policies have been used in municipalities nationwide to achieve this objective. Several key reasons noted for adoption of strong PILOT policies are listed below. • With an increasing percentage of exempt property within a City, nonprofits should share in the cost of basic services which benefit them. Police and fire protection and road maintenance are the costs most frequently allocated to exempt property owners in other municipalities. • A strong PILOT policy has the potential to help ease the tax burden on non-exempt property owners, and create a more equitable distribution of the tax levy across those who consume core City services. • PILOT policies can help address inequities created by the charitable tax exemption (i.e. the greatest tax savings goes to organizations who have the most valuable property holdings). • PILOT policies can reduce inefficient location decisions made by nonprofits (i.e. exempt status creates an incentive for nonprofits to locate in cities where the tax savings are higher). Revised: September 28, 2018 Page 2 City of Portland Payment in Lieu of Taxes Policy (PILOT) 3. FIVE BASIC PRINCIPLES OF THE PILOT POLICY I. Participation in the PILOT Program is voluntary Consideration was given to seeking an ordinance change to require PILOT payments and ensure more uniform participation. However any attempt to impose a legal or statutory requirement would face significant opposition and runs counter to the spirit of partnership between the City and its local institutions that a successful PILOT program would provide. II. PILOT should be applied equally to all current and future non-profit groups in Portland All non-profit institutions should participate in the PILOT program. While significant focus has been placed on the City’s medical and educational institutions, the City’s museums, cultural facilities, and other significant non-profits share a similar interest in the City. However, while broad participation is essential to the program’s success, the City has determined that an exception should be made for smaller nonprofits which may lack the resources to fully engage in the PILOT process. Normally, a threshold of $2 million in assessed value would meet this goal. An exemption of this amount will be applied to all organizations under this policy, eliminating the PILOT completely for the smaller institutions, while mitigating the financial impact of PILOT payments on institutions just beyond this threshold. III. PILOT contributions should offset cost of basic City services: 25% of full tax levy Revised: September 28, 2018 Page 3 City of Portland Payment in Lieu of Taxes Policy (PILOT) PILOT contributions should be based on the value of real estate owned by an institution. This approach both reflects the size and quality of the institution’s real estate holdings and is consistent with the approach taken for taxable properties. PILOT policies nationwide set contribution levels at an amount designed to cover the portion of the tax levy related to basic and core City services. For purposed of this PILOT, those services have been designated as public safety services (police and fire) and basic public works services including snow removal. This amount has remained at approximately 25% of the City’s tax levy over many years and this level has been deemed to be appropriate for the current policy. IV. PILOT policy includes a SILOT (Services In Lieu of Taxes) deduction up to 50% Community benefits are an important aspect of an institution’s contribution to the City. Institutions should receive up to a 50% PILOT deduction for qualifying community programs and services that uniquely benefit Portland residents. In the case of exceptional opportunities for partnership, the 50% cap may be exceeded. Institutions should also receive a credit on their PILOT in the amount of real estate taxes paid on properties that would ordinarily qualify for a tax exemption based on use and a credit for costs paid which would otherwise be paid. Section X of this document contains more detail on criteria for the SILOT deduction. V. The new PILOT formula should be phased in over a 5-year period starting in FY 2019 While the payments currently made by some institutions approach the levels indicated by the program levels recommended above, most institutions fall below the recommended amounts. Institutions will require time to make the necessary adjustments in their budget and financial plans to accommodate increased PILOT Revised: September 28, 2018 Page 4 City of Portland Payment in Lieu of Taxes Policy (PILOT) amounts. To ensure a smooth transition, the Task Force recommends that the new formula be phased in over a time period of not less than 5 years. 4. IS THE PILOT POLICY APPLICABLE TO MY ORGANIZATION? All tax exempt organizations are encouraged to participate in the PILOT policy. As noted previously an exemption amount of $2M will be applied to all organizations under this policy, eliminating the PILOT completely for the smaller institutions, while mitigating the financial impact of PILOT payments on institutions just beyond this threshold. These exempt organizations will be noted in the PILOT Policy Annual Report published each fiscal year. 5. CALCULATION OF PILOT PAYMENT DUE PILOT contributions are based on the value of real estate owned by an institution. The calculation of recommended PILOT payment due can be determined as follows: Step 1: Begin with total assessed value of exempt property owned by an organization Step 2: Subtract the $2M of PILOT exemption Step 3: Divide by $1000 (the mil rate is applied per $1000 of assessed value) Step 4: Multiply by the current City of Portland fiscal year mil rate Step 5: Multiply by 25% Step 6: Subtract any agreed upon SILOT credit (see Section 6 for more details on SILOT) The calculation begins with 100% of an exempt property owner’s assessed value related to their Revised: September 28, 2018 Page 5 City of Portland Payment in Lieu of Taxes Policy (PILOT) exempt property only (i.e. non-exempt property is already included in the regular property tax billing and should be excluded from the PILOT calculation). The $2M of PILOT exemption should be subtracted from this total, and the remaining total should be divided by $1000. The result should be multiplied by 25% to determine the PILOT amount due. The 25% represents the cost of the City’s “core” services which are public safety (Police and Fire Department) and basic street maintenance / winter operations. The PILOT payment due is then reduced by any available SILOT (Services-in-lieu-of-taxes) credit which has been applied to the exempt organization by the City. SILOT credits are not guaranteed to every organization and are calculated on a case by case basis by the City. The SILOT credit may not exceed 50% of the total amount of the PILOT due. See the SERVICES IN LIEU OF TAXES (SILOT) CREDIT section for complete details on SILOT criteria and calculation. 6. SERVICES IN LIEU OF TAXES (SILOT) CREDIT In consideration of the community benefits of the exempt organization within the City, the PILOT policy includes a deduction for services provided. A list of items which WOULD qualify for SILOT credit are listed below. In general only activities which are outside an exempt organization’s core mission would be considered for SILOT credit, however exceptions will be considered when a direct benefit to City of Portland residents can be reliably measured. An exempt entity will have an opportunity on an annual basis to outline their SILOT contributions via a standard form distributed with the estimated PILOT bill. Participation in City Initiatives • Targeted scholarships for Portland residents • Summer Job Creation / Youth Employment • Set Up Initiative Health Disparities Initiative Policy Based Collaborations Revised: September 28, 2018 Page 6 City of Portland Payment in Lieu of Taxes Policy (PILOT) • Public/Community Health Initiatives • Partnerships with Local Schools • Job Training Initiatives • Direct support on City Council Goals / participation on Task Forces Other Direct Contributions • Real Estate Taxes on Property Used for Institutional Purposes • Donations to City capital projects or initiatives • Donations in kind (i.e. real estate, personal property) • Provision of services otherwise provided by the City (i.e. snow removal on public right of way, maintenance of a public facility, security services provided in public areas) Good Neighbor Activities • Volunteer Efforts of Students/Employees • Sponsorships of local organizations A non-comprehensive listing of items which would NOT qualify for SILOT credit is below: • Real Estate Taxes on Property used for Non-institutional Purposes • Linkage Payments • Permits Inspection Fees • Student Spending • Salaries Paid to Employees • Construction Costs • Purchase of Goods, Services • Grants Received / Outside Money • Operating Support for Community Health Clinics • Unreimbursed Medicare or Medicaid If an exempt property owner is considering a formal PILOT payment to the City and would like SILOT credit the Finance Department should be contacted to begin the process. Revised: September 28, 2018 Page 7 City of Portland Payment in Lieu of Taxes Policy (PILOT) 7. ANNUAL BILLING AND FIVE-YEAR PHASE IN (FY20-FY24) Annual Billing The annual billing for the PILOT will be performed by City staff. PILOT bills will be sent on a semiannual basis on a schedule similar to regular property tax billing – typically PILOT bills will be sent in July of each fiscal year. A SILOT credit application will also be enclosed with the PILOT bill and each exempt organization will have 30 days to complete and return form. The City will review the forms and notify each organization of SILOT credits received – including a revised PILOT bill for the current fiscal year. PILOT payments will be due on the regular property tax payment dates – typically the second Friday in September and March of each year. Five Year Phase In – New PILOT Agreements For any exempt organizations impacted by this policy, who currently exist in the City and are remaining in their existing locations, a five year phase in is permitted. The amounts due in the first five tax years of the new program are as follows: FY20 – 10% of the normal PILOT amount FY21 – 20% of the normal PILOT amount FY22 – 30% of the normal PILOT amount FY23 – 40% of the normal PILOT amount FY23 – 50% of the normal PILOT amount For any NEW exempt organizations seeking to locate within the City or Portland the full PILOT amount is due in FY20. For exempt organizations who currently exist within the City and are seeking to expand their footprint within the City, the full PILOT policy would be due on any new Revised: September 28, 2018 Page 8 City of Portland Payment in Lieu of Taxes Policy (PILOT) property acquired. 8. GUIDANCE FOR CITY STAFF – ENCOURAGING PARTICIPATION IN THE PILOT PROGRAM AND ANNUAL REPORTING ON PILOT PAYMENTS Several common transactions should be used as opportunities for City staff to inform exempt organizations about the PILOT policy and in some cases encourage participation. Property Sale – Where conversion Strongly encourage signing of a new PILOT agreement, to exempt property present policy along with standard agreement. Building Permit – Where Strongly encourage signing of a new PILOT agreement, conversion to exempt property present policy along with standard agreement. Zoning Amendment Request Strongly encourage signing of a new PILOT agreement, present policy along with standard agreement. Site Plan Review Inform of PILOT policy – present copy of document Passage of Formal Pilot Policy / Notify all potentially impacted exempt organizations Amendments to PILOT Policy Finally, the Finance Department along with the Assessors Department will publish a PILOT Annual Report each fiscal year noting the complete listing of exempt organizations who have been sent a PILOT letter, noting any PILOT contributions received, and any SILOT credits granted. Revised: September 28, 2018 Page 9