Oro Valley Considers Increases In Non Utility Development Impact Fees

The town of Oro Valley is considering a substantial change in development impact fees.  These are fees paid by new construction to the town.  The fee changes are required by Senate Bill 1525.  This bill mandates that fees be set in a specified manner based on certain projections; and that a new fee structure be implemented by August 1, 2014.  Oro Valley plans to implement the new fees on July 1.

Bill 1525 requires changes to all impact fees.  We previously reported that the town is considering changes in water development impact fees.   In Oro Valley, there are non utility impact fees for transportation, parks and police.

Last week, the Oro Valley town Council conducted a hearing on the proposed impact fees.

The non utility impact fees are based on assumptions regarding land use and on an infrastructure improvement plan.

The assumptions used for land use were based on existing town approved land use.   The population is projected to grow by 4,700, adding 1,400 housing units over 10 years.  These were developed from Pima Alliance of Governments (PAG) projections.   Council Member Hornat noted that changes that are made to land use in the future are not anticipated in the projections since the projections are based on current approved land use.

Oro Valley capital improvement plans for the 10-year projection period include $27.2 million, $5.0 million and $2.2 million for transportation, parks and police improvement.

The plan and projections do not include any assumptions as to growth through annexation.

The proposed non utility impact fee structure eliminates non utility impact fees imposed on non residential development for parks development. This is required by SB 1525.  As noted by Council Member Zinkin at the meeting, non residential development, such as schools, do have an impact on the parks needed in the community.    Town Finance Director Stacey Lemos noted that there was no clear relationship between non residential development and the impact on parks and that "... unless there is a study that documents that, we really are on unsure footing on our ability to go ahead and assess those fees." Council Member Burns agreed in general with that comment with the exception of the hotel/motel category.  He noted that the town is seeking events to host in our community that involve our recreational facilities. "The are hopefully using our parks," he noted.

SB 1525 does not allow impact fees for parks greater than 30 acres.  So, for example, improvements to the entire Naranja Town Site amount eligible for inclusion in determining the basis of the fee.  Yet, as resident Bill Adler noted during the public hearing portion of the meeting, business owners want Oro Valley to provide recreation facilities to attract talent to the community.  Adler advocated that the council consider legislative activism to change this portion of the law.

David Godlewski, President of the Southern Arizona Homebuilder's Association, observed during the public hearing that he plans to monitor and provide council on the revised fees as the process moves forward.

There were 2 public comments at this hearing.  There will be one more public hearing on all impact fees. This will be on February 19, 2014.   Perhaps, this is something with which you may want to become more familiar so that you can "weigh-in" at this hearing. You will also have an opportunity to learn more about the land use assumptions and the infrastructure plans that underly the new rates at the council meeting of January 15.  Formal adoption of the fees will be considered by council on April 2.
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