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Title:
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Ordinance 30-2024: An ordinance on second reading amending Title 1, Chapter 14 of the City Code regarding Land Development Impact Fees
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Agenda Date: 12/17/2024
Subject:
Title
Ordinance 30-2024: An ordinance on second reading amending Title 1, Chapter 14 of the City Code regarding Land Development Impact Fees
Body
From:
James L. Becklenberg, City Manager
Prepared by:
Kevin Orton, Budget Manager
Presentations:
Tiffany Hooten, Finance Director
Kevin Orton, Budget Manager
PURPOSE:
Does council support an ordinance amending Chapter 14 of Title 1, Land Development Impact Fees?
LONG-TERM OUTCOME(S) SERVED:
High-Quality Governance
DISCUSSION:
In 2013, council adopted capital facility impact fees/land development impact fees. Land Development Impact fees are charged for residential and nonresidential development in the city and fund capital improvements needed to address demand attributable to the new development. Impact fees are developed through an evaluation of the costs of capital improvements needed to address demand attributable to new development and are not to be used to fund operation, maintenance or replacement costs or otherwise fund the general costs of government. The most recent Land Development Impact fee study was in 2020 and is attached as reference. It is common practice to review these periodically and this will be incorporated into the 2026 budget.
These fees have been amended over the years with the last amendment occurring in October 2023 for inflation and multimodal transportation phase II increase.
Staff is proposing an increase in the Land Development Impact fees as follows:
* To include an inflation factor as provided for in Title 1, Chapter 14, regarding Land Development Impact fees approved in 2021.
* Adjust the multimodal transportation impact fees for non-residential classification types for phase III of a three-phase approach. As reference, Ordinance 10-2021 includes information related to this phase in and inflation factor.
Inflation Factor
Title 1, Chapter 14 allows for an annual increase for inflation for Land Development Impact Fees. The city has established the use of the Denver-Aurora-Lakewood CPI as the inflation allocation. The 2023 CPI was 5.22%. This amendment increases the Land Development Impact Fees by this inflation factor. Staff will review impact fees on an annual basis and adjust accordingly each year.
Multimodal Transportation Phase-In
During the March 9, 2021 study session, council discussed the influence of impact fees on the city's economic development strategy and in particular business attraction for retailers. The proportional fee structure outlined at that study session allowed the city to keep up with growth as it seeks to recover the capital costs that new development creates. Staff included a 3-year phased approach in response to council's request. As such, the multimodal transportation fee reflected in the current ordinance of $0.30 escalated to $0.61 in 2023 and will escalate to $0.91 in 2024.
BACKGROUND:
In 2013, council adopted capital facility impact fees/land development impact fees. These fees have been amended over the years with the last amendment occurring in October 2023 for inflation and multimodal transportation phase II increase.
Prior Actions or Discussions
Land Development fees were adopted in August 2013 and amended July 2014, November 2018, April 2019, and May 2021 to varying degrees.
In October 2023, council approved increasing the impact fees by inflation, and council adjusted impact fees for non-residential classification types for phase II of the three-year multimodal transportation phase approach.
This ordinance passed on first reading on December 3, 2024.
FISCAL IMPACTS:
With the increase in fees, it is anticipated to provide additional revenues; however, it will depend on the type of development. In 2025, there are several significant developments planned. The total estimated land development fees in 2025 is $6,453,777.
STAFF RECOMMENDATION:
Staff recommends approval of the impact fees on second reading.
ALTERNATIVES:
1. Approve amendments as proposed.
2. Make no changes at this time and potentially miss opportunities to defray the projected impacts on capital facilities caused by the proposed development.
PROPOSED MOTION:
Proposed Motion
I move to approve Ordinance 20-2024 on second reading amending Title 1, Chapter 14 of the City Code regarding Land Development Impact Fees.