Transportation Impact Fees and Street Maintenance Fees Presented

Transportation Impact Fees and Street Maintenance Fees Presented to the City Council by the Planning and Development Department January 21, 2010 1

Purpose of Today’s Meeting • Refresh the City Council on the recommendations from the City Manager’s Committee on Infrastructure Funding • Receive feedback on City Council policy options 2

Underlying Principles of Study • Maintenance of economic competitiveness – Avoid the “tipping point” • Equity – Apportion costs among beneficiaries of the infrastructure • Efficiency – Funding mechanism that allows efficient delivery of projects 3

Key Findings • Property Tax & Debt Financing – Per capita property tax rates and expenditures high – Share of tax allocated to debt much lower • Development Costs: At or below the median of comparable cities • Occupancy Costs: – Residential costs near the median of comparable cities – Non-residential costs higher than most comparable cities • Economic impacts – Transportation investments generate net benefits to the local economy under all scenarios 4

I. Transportation Impact Fees 100% 80% 60% 50% 40% 36% 27% 20% 0% Existing Residential Proposed Commercial & Industrial All 5

Grace Periods • Granted to all building permits associated with a plat that was filed before the impact fee effective date – One year from the effective date of the ordinance or – Two years from plat approval, whichever is longer. • Resulted in an impact fee exemption on 97. 8% of all building permits since July 1, 2008. 6

Smoothing • Recommend 50% smoothed rate for North, West, and South ($3, 005 singlefamily equivalent) • Recommend retaining $2, 000 single-family equivalency rate for East 7

Scenarios (North, South, and West except AA and W) Current 50% Single-Family (per unit) $2, 000 $3, 005 Apartment (per unit) $1, 228 $1, 845 Day Care (per 1, 000 sf) $6, 851 $13, 725 Sit-Down Restaurant (per 1, 000 sf) $2, 485 $4, 978 Drive-Thru Fast Food (per 1, 000 sf) $10, 267 $20, 568 Grocery Store (per 1, 000 sf) $5, 324 $10, 666 Drug Store (per 1, 000 sf) $3, 502 $7, 016 General Office (per 1, 000 sf) $2, 015 $4, 036 8

Discount for Locating on Existing Arterials (North, South, and West except AA and W) Single-Family (per unit) 27%/36% 15% Collect. Disc. $ 2, 000 $1, 700 50% Collect. Disc. $ 3, 005 $ 1, 502 Apartment (per unit) $ 1, 228 $1, 044 $ 1, 845 $ Day Care (1, 000 sf) $ 6, 851 $5, 824 $13, 725 $ 6, 862 Restaurant (1, 000 sf) $ 2, 485 $2, 112 $ 4, 978 $ 2, 489 Drive-Thru Rest. (1, 000 sf) $10, 267 $8, 727 $20, 568 $10, 284 Grocery Store (1, 000 sf) $ 5, 324 $4, 526 $10, 666 $ 5, 333 Drug Store (1, 000 sf) $ 3, 502 $2, 977 $ 7, 016 $ 3, 508 General Office (1, 000 sf) $ 2, 015 $1, 713 $ 4, 036 $ 2, 018 922 9

Sample Fees – General Office Current: • 27% collection rate: $60, 540 • 15% discounted rate: $51, 390 Proposed: • 50% collection rate: $121, 080 • 50% discounted rate: $60, 540 Typical area: 30, 000 sf 10

Sample Fees – Drive-Thru Fast Food Current: • 27% collection rate: $30, 801 • 15% discounted rate: $26, 181 Proposed: • 50% collection rate: $61, 704 Typical area: 3, 000 sf • 50% discounted rate: $30, 852 11

Sample Fees - Daycare Current: • 27% collection rate: $27, 404 • 15% discounted rate: $23, 296 Proposed: • 50% collection rate: $54, 900 Typical area: 4, 000 sf • 50% discounted rate: $27, 448 12

Sample Fees – Grocery Store • 27% collection rate: $319, 440 • 15% discounted rate: $271, 560 • 50% collection rate: $639, 960 • 50% discounted rate: $319, 980 Typical area: 60, 000 sf 13

Discounts for Extraordinary Investment • Discount rate of 15 -50% • Minimum capital investment of $15 million – Fort Worth Chamber and Housing and Economic Development suggest reducing this threshold to $10 million • Creation of 100 jobs – Minimum salary of twice minimum wage, plus benefits • Other tools: – Tax abatements – Tax Increment Finance Districts – Triple Freeport 14

II. Transportation Utility • Create Transportation Utility with monthly fee assessed on all land uses that generate trips on the road infrastructure • Use proceeds to supplement General Fund commitment to street maintenance and to provide for existing capacity deficiencies • Assumes impact fee revenue and increasing taxes from growing tax base funding new capacity needs 15

Sample Collection Rates Single-family residence Multi-family residence Office / 1, 000 sf $5. 50 Retail / 1, 000 sf $10. 33 Industrial / 1, 000 sf $4. 46 Annual Revenue for Street Maintenance $31 M $3. 38 $7. 39 16

Relative Cost of Street Maintenance Fee 17

Development Costs - Existing Fort Worth Percent of Median Single Family Multi. Family (n = 4) Retail Office Central Office Outer Industrial (n = 5) (n = 12) Infrastructure & Fees 104% 91% 100% 85% 111% 83% Infrastructure, Fees & Bldg Costs 101% 100% 99% Occupancy Costs 97% 98% 106% 120% 181% 177% 117% 18

Development Costs With Revenue Options Fort Worth Percent of Median Single Family Multi. Family (n = 4) Retail Office Central Office Outer Industrial (n = 5) (n = 12) Infrastructure & Fees 105% 103% 146% 85% 154% 86% Infrastructure, Fees & Bldg Costs 101% 102% 97% Occupancy Costs 101% 103% 123% 183% 174% 126% 99% 97% 19

Revenue Estimates for Recommendations 10 -yr. revenue Unfunded Transportation Infrastructure Increase Impact Fee to 50% of Maximum Debt Capacity – Increase Share to 90% ($1, 311 million) $ 83 million $ 104 million Transportation User Fee $ 494 million Public Improvement Districts N/A Deferred Improvements and ($ 630 million) Maintenance Funds 52% of the gap 20

10 -Year Transportation Improvements Plan With Revenue Options 2500 Projected Cost Ongoing Maintenance New Development Needs Capacity Deficiencies Deferred Maintenance $ Million 2000 1500 Revenues 1000 Unfunded Impact Fee - Increase Transportation User Fee Debt Capacity - Incr. Share Existing Sources 500 0 Infrastructure Needs Projected Revenues 21

Next Steps • Respond to questions regarding the policy options • Complete studies and develop ordinances related to impact fees and transportation utility • Continue dialogue with Development Advisory Committee for technical assistance • Public hearings as specific ordinances considered as early as October 22