Capital Improvement Advisory Committee

AGENDA Capital Improvement Advisory Committee 6:00 PM - Thursday, May 25, 2023 City Council Chambers, 201 E. Nash Street, Terrell, TX Board Members Danny Stephens, Member Gabriel Cabrera, Member Garrett Carlisle, Member Joe Hood, Member Clint Howie, Member Trini B. Jones, Member Debra Kelley, Member Shayne Phillips, Member Jorge Vargas, Member Chris Snapp, City Engineer NOTICE IS HEREBY GIVEN that the Capital Improvement Advisory Committee will conduct a meeting at 6:00 p.m. on Thursday, May 25, 2023, at Terrell City Hall located at 201 East Nash Street. The meeting is open to the public with limited seating in the Council Chambers. Page 1. CALL TO ORDER 2. HEAR REMARKS FROM VISITORS. 3. DISCUSSION ITEMS 3.1. Review the Impact Fee CIP and Reports and other related information 3 - 30 presented by Freese & Nichols and City Staff CIAC Presentation 3.2. Consider Remaining Schedule and update. 31 Project Schedule Page 1 of 31  4. ADJOURN. I, the undersigned authority, do hereby certify that the above NOTICE OF MEETING of the Capital Improvement Advisory Committee is a true and correct copy of said NOTICE, which has been posted on the front OUTDOOR BULLETIN BOARD CABINET FOR AGENDAS of the Terrell City Hall, Terrell, Texas, a place convenient and readily accessible to the General Public and on the website at cityofterrell.org, and which has been continuously posted for a period of seventy- two (72) hours prior to the date and time said meeting was convened. Posted Monday, May 22, 2020 – 5:00 p.m. _______________________________________ Dawn Steil, City Secretary This facility is wheelchair accessible and accessible parking spaces are available. Requests for accommodations or interpretive services must be made 48 hours prior to this meeting. Please contact the City Secretary’s office at 972-551-6600 for further information. Braille is not available. The Capital Improvement Advisory Committee Reserves the Right to Adjourn into Executive Session to Seek Legal Counsel on a Matter Which the Canon of Legal Ethics Demands to Preserve the Attorney-Client Privilege Pursuant to Section 551.071(2) of the Texas Government Code. Page 2 of 31  ITEM 3.1. May 25, 2023 Capital Improvements Advisory Committee (CIAC) Page 3 of 31 Impact Fee Basics and Land Use Assumptions/Growth Rates Road, Water and Wastewater Impact Fee Program Update  ITEM 3.1. Agenda Impact Fee Basics & Process 1 Service Areas and Growth Rates 2 CIAC Discussion and Comment on LUA Growth Rates Page 4 of 31 3  ITEM 3.1. Role as CIAC Member Provide Comment: • Land Use Assumptions • Capital Improvement Plans (CIP) • Impact Fee CIAC Meetings and Action Items: 1. May 25th: 101, LUA Growth Rates 2. August 24th: LUA and CIPs 3. December 14th: Impact Fee and Collection Rates 4. February 2nd: Collection Rates and Recommendation to Council Page 5 of 31  ITEM 3.1. What is an Impact Fee? Mechanism for funding the infrastructure necessary to accommodate new development including: • One-time charge • Funding of certain new facilities • Recoupment of certain capital improvements Structured approach Page 6 of 31 to assessment of fees  ITEM 3.1. Basis of Impact Fees? New development should pay for a portion of the cost of public infrastructure required to serve it. Page 7 of 31 5  ITEM 3.1. Types of Impact Fees? ROADWAY • Based on size of development, service area, and type of development • Collected at time of building permit WATER & WASTEWATER • Based on meter size • Collected at time of connection to system • Collected and applied citywide Page 8 of 31 Both types of fees are calculated based on Service Units – units of development brought online 6  ITEM 3.1. Why do Cities have Impact Fees? • Pay for Cost of Development Related to Required Capacity of System • New Connections Take Available Capacity From Water and Wastewater Mains • New Developments Add Vehicles Traveling the Roadways • The Fees Provide an Additional Revenue Paid by Developers Because of These Impacts • Eliminates All Costs Being Paid by Existing Residents • Other Cities We Would Expect to be in Competition With Have Impact Fees Page 9 of 31 7  ITEM 3.1. How are Impact Fees Set? • Project Population/Employment and Annual Growth Rates • Develop Land Use Assumptions • Determine Capital Improvements to Meet Growth Demands • Evaluate Water, Wastewater and Roadway Required to Meet Growth • City Decides What Percent of Capital Costs Are Charged to Developers Page 10 of 31 8  ITEM 3.1. Why should the Developer not pay 100% of the cost of new Infrastructure? • Projects become unaffordable • When growth occurs, everyone benefits • Example: If a new development causes us to build a new water tower. Existing water customers obviously get some benefit out of that too, not just the new development. Page 11 of 31 9  ITEM 3.1. Will Impact Fees Hurt Growth? • As long as the cost of developing in Terrell is attractive to developers, impact fees should not restrict growth. A developer looks at all of his costs: land cost, impact fees, construction cost, utility connection fees, building permits, etc. Impact fees are just one part of that. Page 12 of 31 10  ITEM 3.1. What can Impact Fees Pay for? construction surveying engineering land acquisition debt service Water supply, treatment, and roadway facilities distribution facilities Impact fees can also pay for Page 13 of 31 required updates to the included in the • Impact Fee schedule Impact Fee • Impact Fee CIP Capital Improvement Plan 11  ITEM 3.1. Background • Council Actions Adopting impact fees: • Initiated in 2004 – Ordinance 2217 • Updated in 2009 – Ordinance 2400 • Updated in 2014 – Ordinance 2597 • Updated in 2019 – Ordinance 2767 • Fees must be updated every 5 years. This is a statutory requirement. • Study determines the maximum fee allowable by state law • City Council sets the actual fee to be collected Page 14 of 31 from new development 12  ITEM 3.1. Historic Impact Fee Revenue RECENT IMPACT FEES REVENUE HISTORY $900,000 $800,000 TOTAL REVENUE (FY05-FY22) = $4,124,527 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 Page 15 of 31 $- FY18 FY19 FY20 FY21 FY22 13  ITEM 3.1. Overview of Study Tasks Service Areas Land Use Assumptions Service Units Existing Capacity, Usage & Deficiencies Ch 395, TLGC Projected Demand Technical Capital Improvements Plan Requirements Service Unit Equivalency Cost per Service Unit Calculation Addressed in Page 16 of 31 Study Report Discuss CIAC Recommendation to Council 14  ITEM 3.1. Current Fee Schedule (Single Family) April 2, April 2, April 2, April 2, April 2, Effective Date 2019 2020 2021 2022 2023 Water $1,221 $1,221 $1,221 $1,221 $1,221 Wastewater $2,167 $2,167 $2,167 $2,167 $2,167 Roadway* $1,952 $2,220 $2,500 $2,795 $3,104 Total $5,340 $5,608 $5,888 $6,183 $6,492 *For development within West and East service areas; $0 for Brushy Creek Service area Page 17 of 31 15 ITEM 3.1. 16 Benchmarking Page 18 of 31  ITEM 3.1. Policy Considerations • What rate to collect; retain previous rate? • Application of Fee • Residential vs. Non-residential • Special Considerations • Incremental Increases • Special Considerations • Exemptions • Public Schools, Public Housing Page 19 of 31 • As defined by policy  ITEM 3.1. Fee Collection Process 1 Final plat submission 2 Fee calculated and assessed upon final plat approval 3 Fee collected at time of building permit issuance Fees used to implement projects in the 4 Impact Fee Capital Improvement Plan Fees are imposed on: Page 20 of 31 • New development • Expansion • Change in use to higher intensity development  ITEM 3.1. Service Areas and Growth Rates Page 21 of 31  ITEM 3.1. Roadway Service Area • Confined to city limits • Service areas up to 6-mile diameter • Fees must be spent in the service area in which they are captured Page 22 of 31  ITEM 3.1. Water Service Area • Confined to ETJ • One service area Page 23 of 31  ITEM 3.1. Wastewater Service Area • Confined to ETJ • Does not include Northspur and Eastland developments • One service area Page 24 of 31  ITEM 3.1. Land Use/Growth Assumptions • 10-year growth projections by service area • Based on trend/forecasted community growth • Population/employment used to derive demand from future development • Basis for CIP development Page 25 of 31  ITEM 3.1. Proposed Developments (10-year) Single-Family Multi-Family Estimated Estimated Development Units Units Population Employment Hillside Ranch 654 0 1,929 0 The Woodlands 278 0 820 0 The Preserve 550 0 1,623 0 Crossroads MF Phase 1 0 285 568 0 Crossroads MF Phase 2 0 300 598 0 Griffith and Lovers 8 0 24 0 Hunters Ridge 52 0 153 0 Terrell Assisted Living 0 66 132 0 Griffith Forest Tract 350 0 1,033 0 The Cedars at Rose Hill 34 0 100 0 Rose Hill Estates 170 0 502 0 Westwood 0 900 1,795 50 Magnolia Estates 41 0 121 0 Terrell Senior Living Phase 3 0 88 175 0 Creekside Estates 440 0 1,298 0 Rose Hill Adult Community 70 0 207 0 Western Security 1,200 300 4,138 0 Page 26 of 31 Evening Star 1,200 0 3,540 0 Eastland Park 0 0 0 12,900 Northspur 1,450 0 4,278 2,000 Arboretum Estates 2,390 630 8,307 600 Total 8,887 2,569 31,339 15,550 24  ITEM 3.1. Growth Assumptions • 2020-2022: 5% annual growth • Projected Water: 10% CAGR • Projected Roadway: 7% CAGR Page 27 of 31 25  ITEM 3.1. CIAC Action: Recommendation of Growth Rate Page 28 of 31  ITEM 3.1. May 25 Impact Fee 101, Growth Rates for Land Use Assumptions Aug 24 LUA, CIPs and Prelim Cost per Service Unit Calculations Impact Fee Calculations Dec 14 and Collection Rate Feb 2 Page 29 of 31 Recommendation Letter to Council  ITEM 3.1. May 25, 2023 Capital Improvements Advisory Committee (CIAC) Page 30 of 31 Impact Fee Basics and Land Use Assumptions/Growth Rates Road, Water and Wastewater Impact Fee Program Update ITEM 3.2. Page 31 of 31