2. What are Impact Fees?What are Impact Fees?
““A charge or assessment imposed by a politicalA charge or assessment imposed by a political
subdivision against a new development in order tosubdivision against a new development in order to
generate revenue for funding or recouping the costgenerate revenue for funding or recouping the cost
of capital improvements or facility expansionsof capital improvements or facility expansions
necessitated by and attributable to the newnecessitated by and attributable to the new
developmentdevelopment.”.”
Texas Local Government Code, Section 395.001Texas Local Government Code, Section 395.001
3. History of Impact FeesHistory of Impact Fees
NationallyNationally - 1920s- 1920s
TexasTexas, Local Gov Code 395 – 1987, Local Gov Code 395 – 1987
– Since 1987 numerous Texas CitiesSince 1987 numerous Texas Cities
College StationCollege Station, Ch 15 – 1992, Ch 15 – 1992
– 4 Sewer Impact Fee Areas4 Sewer Impact Fee Areas
– 1 Water Impact Fee Areas1 Water Impact Fee Areas
5. Impact Fees in GeneralImpact Fees in General
ShiftsShifts attributable capital growth costs fromattributable capital growth costs from allall
tax payerstax payers toto the new growththe new growth
StandardizesStandardizes and limits fee calculationand limits fee calculation
– ProportionalProportional to development impactto development impact
– RequiredRequired credit reductioncredit reduction for each development’sfor each development’s
city revenue generationcity revenue generation
Limited toLimited to water, sewer, roads, andwater, sewer, roads, and
drainagedrainage
Doesn’t replace the need to issue all debt, but itDoesn’t replace the need to issue all debt, but it
can help pay off some debtscan help pay off some debts
6. State and Local RegsState and Local Regs
Texas LawTexas Law has defined it to make ithas defined it to make it
equitableequitable to developmentto development
Requires:Requires:
– Planning and Engineering analysisPlanning and Engineering analysis
– Public HearingsPublic Hearings
– Council AdoptionCouncil Adoption
7. Assessment / CollectionAssessment / Collection
Assessment (Setting the fee amount) is atAssessment (Setting the fee amount) is at
thethe Plat RecordationPlat Recordation
Collection is at Issuance ofCollection is at Issuance of BuildingBuilding
PermitsPermits
8. Fee CalculationFee Calculation
Land Use AssumptionsLand Use Assumptions
for projected 10-year growthfor projected 10-year growth
IFCP PlanIFCP Plan
– Service AreasService Areas
– Service UnitService Unit, Living Unit Equivalent, Living Unit Equivalent
– Maximum Assessable FeeMaximum Assessable Fee per Serviceper Service
UnitUnit
9. Maximum AssessableMaximum Assessable
Fee per Service UnitFee per Service Unit
Based on:Based on:
– ““Service UnitService Unit ””
– 50% Credit50% Credit oror Detailed CreditDetailed Credit of amount ofof amount of
costs to be recovered to account for anticipatedcosts to be recovered to account for anticipated
ad valorem tax and revenues to City from thead valorem tax and revenues to City from the
development.development.
– Council can adoptCouncil can adopt Max FeeMax Fee oror Lesser FeeLesser Fee
10. Impact FeesImpact Fees cancan
Include:Include:
City costs inCity costs in ProposedProposed
ImprovementsImprovements inin next 10 yearsnext 10 years forfor
10 year anticipated build-out10 year anticipated build-out
developmentdevelopment
City costs in allCity costs in all ExistingExisting
ImprovementsImprovements thatthat have availablehave available
capacitycapacity for 10 year anticipated build-for 10 year anticipated build-
out developmentout development
12. Improvements needed for developmentImprovements needed for development
growthgrowth beyond 10 yearsbeyond 10 years
ExpansionsExpansions not in Impact Fee Plannot in Impact Fee Plan
Expansions to “better” service orExpansions to “better” service or
““stricter” Regulationsstricter” Regulations
Operation and Maintenance costsOperation and Maintenance costs
More than the calculated “MaximumMore than the calculated “Maximum
Assessable Fee Per Service Unit”Assessable Fee Per Service Unit”
Impact FeesImpact Fees cannotcannot
Include:Include:
14. Utility Impact FeesUtility Impact Fees
WithinWithin City LimitsCity Limits and ETJand ETJ
Fees based on:Fees based on:
– Area servedArea served ((can be “city-wide”can be “city-wide”))
– Water meter sizeWater meter size (water & sanitary)(water & sanitary)
16. Roadway Impact FeesRoadway Impact Fees
WithinWithin City Limits ONLYCity Limits ONLY
RoadwayRoadway “benefit zone”“benefit zone”
Roadway improvements must beRoadway improvements must be
assessedassessed,, collectedcollected andand spentspent
within the development’s Servicewithin the development’s Service
AreaArea
Areas maximum ofAreas maximum of 6 mile diameter6 mile diameter
C.S. would haveC.S. would have 4 Areas4 Areas
18. Maximum AssessableMaximum Assessable
Fee per Service UnitFee per Service Unit
Based on:Based on:
– ““Service UnitService Unit ” is one vehicle driving one mile” is one vehicle driving one mile
during the afternoon peak hour traffic period,during the afternoon peak hour traffic period,
also known as a ‘also known as a ‘vehicle milevehicle mile ’.’.
– 50% Credit50% Credit oror Detailed CreditDetailed Credit
19. Roadway Impact FeeRoadway Impact Fee
Calculation SummaryCalculation Summary
Land Use Plan yieldsLand Use Plan yields Vehicle Trip GenerationVehicle Trip Generation fromfrom
the New Growththe New Growth
InfrastructureInfrastructure Required by Thoroughfare PlanRequired by Thoroughfare Plan
Develop Impact FeeDevelop Impact Fee Improvement PlanImprovement Plan ($)($)
DetermineDetermine Excess Capacity of ExistingExcess Capacity of Existing ($) Roads($) Roads
CalculateCalculate CreditCredit CalculationCalculation or 50% ($)or 50% ($)
CalculateCalculate Maximum Assessable Impact FeeMaximum Assessable Impact Fee by:by:
Cost of the CIPCost of the CIP ($ New Growth)($ New Growth)
------------------------------------------- = Max Impact Fee Per Service Unit------------------------------------------- = Max Impact Fee Per Service Unit
New Service UnitsNew Service Units (New Growth)(New Growth)
Public Hearings,Public Hearings, Council may enact Lesser FeeCouncil may enact Lesser Fee
21. TimelineTimeline
Engage anEngage an Engineering ConsultantEngineering Consultant (2 Months)(2 Months)
Fee AnalysisFee Analysis andand Public EngagementPublic Engagement
(6 to 12 Months)(6 to 12 Months)
Public HearingsPublic Hearings andand Council EnactmentCouncil Enactment
(3 Months)(3 Months)
One Year “Exemption” Period before feesOne Year “Exemption” Period before fees
applyapply
(For properties that are platted prior to adoption)(For properties that are platted prior to adoption)
22. Other CitiesOther Cities
2012 Duncan National I.F. Study2012 Duncan National I.F. Study
– 28 States with Impact Fees, 271 jurisdictions28 States with Impact Fees, 271 jurisdictions
– 2012 National Averages per Single Family2012 National Averages per Single Family
Roads $3,228Roads $3,228
Water $3,863Water $3,863
Sanitary $3,725Sanitary $3,725
– 8 Texas Cities averages lower than National8 Texas Cities averages lower than National
2014 KHA Metroplex Survey2014 KHA Metroplex Survey
– 35 Metroplex Cities with Roadway Impact Fees35 Metroplex Cities with Roadway Impact Fees
– Average Roadway IF per Single Family ~$2,200Average Roadway IF per Single Family ~$2,200
23. Prior CS Impact FeePrior CS Impact Fee
StudiesStudies
2010 Roadway Impact Fees2010 Roadway Impact Fees
– Based on Average $3,000 per SF HouseBased on Average $3,000 per SF House
– If adopted in 2012, fees ~ $7.0 MIf adopted in 2012, fees ~ $7.0 M
2011 Citywide Utility Impact Fees2011 Citywide Utility Impact Fees
– Based on Water $1,480 per SF HouseBased on Water $1,480 per SF House
– Based on Sanitary $1,578 per SF HouseBased on Sanitary $1,578 per SF House
– If adopted in 2012, fees ~ $7.7 MIf adopted in 2012, fees ~ $7.7 M
24. Direction on Impact FeesDirection on Impact Fees
Proceed toProceed to Engage Consultants?Engage Consultants?
– Water / Wastewater Studies ~$75KWater / Wastewater Studies ~$75K
– Transportation StudyTransportation Study ~$75K~$75K
26. Maximum AssessableMaximum Assessable
FeeFee
per Service Unitper Service UnitSTEPS:STEPS: EXAMPLE:EXAMPLE:
SERVICE AREA ‘A’SERVICE AREA ‘A’
1.1. PROJECT THE AMOUNT OFPROJECT THE AMOUNT OF GROWTH IN SERVICE AREAGROWTH IN SERVICE AREA 15001500
RESIDENTIAL UNITSRESIDENTIAL UNITS
AND 70,000 SF RETAILAND 70,000 SF RETAIL
2.2. ESTIMATE THEESTIMATE THE ADDITIONAL VEHICLE MILESADDITIONAL VEHICLE MILES BASED ONBASED ON 10,000 VEHICLE10,000 VEHICLE
MILES GROWTH PROJECTIONSMILES GROWTH PROJECTIONS
3.3. CALCULATE THE AMOUNT OFCALCULATE THE AMOUNT OF ROADWAY CONSTRUCTIONROADWAY CONSTRUCTION 8.9 LANE MILES8.9 LANE MILES
NEEDED TO ACCOMMODATE GROWTHNEEDED TO ACCOMMODATE GROWTH
4.4. ESTIMATE COSTESTIMATE COST OF NEEDED ROADWAY IMPROVEMENTSOF NEEDED ROADWAY IMPROVEMENTS $33 MILLION$33 MILLION
5.5. SUBTRACT THE DETERMINED CREDITSUBTRACT THE DETERMINED CREDIT FOR THE AD VALOREMFOR THE AD VALOREM $16.5 MILLION$16.5 MILLION
TAX AND UTILITY SERVICE REVENUES GENERATED BY NEWTAX AND UTILITY SERVICE REVENUES GENERATED BY NEW
DEVELOPMENTDEVELOPMENT
6.6. DIVIDE THIS RESULTING COST BY THE TOTAL VEHICLE MILESDIVIDE THIS RESULTING COST BY THE TOTAL VEHICLE MILES ($16.5 MILLION) /($16.5 MILLION) /
ADDED OVER THE NEXT 10 YEAR PERIOD TO DETERMINEADDED OVER THE NEXT 10 YEAR PERIOD TO DETERMINE (10,000 VEHICLE(10,000 VEHICLE
MILES)MILES)
THETHE MAXIMUM ASSESSABLE FEE PER SERVICE UNITMAXIMUM ASSESSABLE FEE PER SERVICE UNIT = $1,650 PER= $1,650 PER
VEHICLE MILEVEHICLE MILE
7.7. COUNCIL MAY ADOPT A FEE AT OR BELOWCOUNCIL MAY ADOPT A FEE AT OR BELOW THETHE <=$1,650 PER VEHICLE MILE<=$1,650 PER VEHICLE MILE
CALCULATED MAXIMUM ASSESSABLE FEE PER SERVICECALCULATED MAXIMUM ASSESSABLE FEE PER SERVICE I.E. COUNCILI.E. COUNCIL
27. Roadway Impact FeeRoadway Impact Fee
STEPS:STEPS: EXAMPLE:EXAMPLE:
DEVELOPMENT ‘XYZ’DEVELOPMENT ‘XYZ’
1.1. DETERMINE THE NUMBER OFDETERMINE THE NUMBER OF DEVELOPMENTDEVELOPMENT 5,000 SF SHOPPING CENTER5,000 SF SHOPPING CENTER
UNITSUNITS (I.E. 1000 SF = 1 DEVELOPMENT UNIT)(I.E. 1000 SF = 1 DEVELOPMENT UNIT) IN SERVICE AREA ‘A’IN SERVICE AREA ‘A’
= 5 DEVELOPMENT UNITS= 5 DEVELOPMENT UNITS
2.2. ESTIMATE THE NUMBERESTIMATE THE NUMBER VEHICLE MILES PERVEHICLE MILES PER FOR A SHOPPINGFOR A SHOPPING
CENTERCENTER
DEVELOPMENT UNITDEVELOPMENT UNIT (I.E. FROM DEFINED(I.E. FROM DEFINED = 2.0 VEHICLE MILES /= 2.0 VEHICLE MILES /
TABLE IN CIP)TABLE IN CIP) DEVELOPMENT UNITSDEVELOPMENT UNITS
3.3. MULTIPLY NUMBER OF DEVELOPMENT UNITS BYMULTIPLY NUMBER OF DEVELOPMENT UNITS BY (5 DEVELOPMENT UNITS)(5 DEVELOPMENT UNITS)
XX
VEHICLE MILES PER DEVELOPMENT UNIT TOVEHICLE MILES PER DEVELOPMENT UNIT TO (2.0 VM / DU)(2.0 VM / DU)
DETERMINEDETERMINE TOTAL VEHICLE MILESTOTAL VEHICLE MILES = 10.0 TOTAL VEHICLE= 10.0 TOTAL VEHICLE
MILESMILES
4.4. MULTIPLY TOTAL VEHICLE MILES BY THE FEEMULTIPLY TOTAL VEHICLE MILES BY THE FEE (10.0 TOTAL VEHICLE MILES) X(10.0 TOTAL VEHICLE MILES) X
PER VEHICLE MILE ADOPTED TO DETERMINEPER VEHICLE MILE ADOPTED TO DETERMINE ($1,100 PER SERVICE UNIT)($1,100 PER SERVICE UNIT)
THETHE IMPACT FEEIMPACT FEE == $11,000 IMPACT FEE$11,000 IMPACT FEE
