Homework Assignment #3 Impact fees 1 of 1 Due: Tuesday, November 5 (at the beginning of class) Total points 20 points 1. Impact fee program on sewer facilities (20 points) The current population of Hyattsville is approximately 20,000 residents. Assume that during the next 20 years, the population is projected to increase to 30,000 residents. As a local government official for the city of Hyattsville, you must design an impact fee program to recoup the costs associated with additional sewer facilities that are needed to accommodate the projected new development Use the example described on pages 24-26 in Nelson et al. (1989) on the impact fee program in Fulton County, Georgia. In particular, use the information on sewer impact fee components (Table 5) and the factor table on average water consumed by land use type (Table 6). Make all calculations for the "high surcharge" scenario. Do not use Table 7 because the example described below has different linear frontage numbers for each land use type. Assume that the projected increases in new development are as follows: 2,800 people in 1 bedroom apartments (Note: Assume one person per apartment unit) 7,200 people in single-family homes (Note: Assume three people per housing unit on average) 5 million square feet of office space 4 million square feet of shopping center space Assume the following on linear frontage by land use type: 20 linear feet per 1 bedroom apartment 80 linear feet per single-family housing unit 200 linear feet per 100,000 square feet of office space 400 linear feet per 100,000 square feet of shopping center space a) For each land use type, what is the total amount collected from impact fees? b) For each residential land use, what is the impact fee per unit? c) For each non-residential land use, what is the impact fee per unit (i.e., 1 unit = 100,000 square feet of space)? d) New development is projected to increase costs for sewer facilities by $56.7 million Will you need to raise property taxes to help cover the additional sewer costs? If so, what proportion of the new sewer facilities costs will be paid from impact fees versus property taxes? TABLE 4. Sample Water Facility Impact Fees ferred to the bond sinking fund. The bond sinking fund is required to have enough money in it to make an annual payment on bonds that were issucd in previous years, to pay for a portion of outstanding bonds, and to pay for a portion of the improvement costs to the sewage systems. Remaining mon ies in the bond sinking fund are placed in the construction fund to be used for capital improvement projects such as expansion of existing treatment fa- cilities, construction of pump stations and interceptor lines, and other im provements to the sewage system. The surplus monies from the construction fund are placed in the renewal and extension fund, which uses the monies for other sewage system operating and capital costs. The sewer impact fee is based on a system that draws from five fees that are currently charged to developers. The one-time fees listed below are based on a 30-day month in order to standardize the fee schedule Land use Impact fee (2) (1) Single family home with 100 FF 2 bedroom apartment building unit with 30 FF per unit 0 story, 100,000 sq ft office building with 330 FF 100,000 sq ft community shopping center with 600 FF $826 $272 $8,069 $7,410 water treatment and storage facilities on a gallon-per-day basis; FF,= total front footage of project i along main waterlines, or total distance of project i boundary to the main waterline; and $/FF = estimated design and con struction cost of an average foot of main waterline, which is $7.50 presently in Fulton County (or $15 when the line is completely off-site or the line abuts only project property). To calculate the design and construction cost of new water treatment and storage facilities for a projected new population of 67,000 for whom no water facilities currently exist, the following procedure is used. Assume that average domestic consumption is projected to be 100 gallons per day (gpd) per person (also assume that fire reserves are to be 50 % of average daily domestic consumption). A two-million-gallon water tank is required along with treatment facilities. Assume the capital costs are $1.7 million. The price per gallon of domestic water delivered (not necessarily stored) is Sewer Use Fee Assesses the developer for the additional impact the development will have on the existing sewer system. The fee is $20.00/linear ft of existing outfall/ interceptor line crossing the property being developed. The fee is waived if the developer has to install the line Sewer Assessment Fee Assesses the developer for the cost of the existing sewer line. The fee is $18.00/linear frontage ft of outfall/interceptor line fronting the property being developed. There is no fee if the developer has to install the line 67,000 people x 100 gpd6,700,000 Sewer Extension Fee Assesses the developer $20.00/linear ft to extend the sewer line to de veloper's property. The fee is waived if the developer has to install the line =the number of gallons per day that must be delivered (3) $1,700,000 $0.253 price of I gpd delivered from the facility 6,700,000 (4) Sewer Availability Fee Surcharge assessed to the developer to recoup the cost of existing sewer facilities, principally treatment facilities. The fee is $62.50/1,000 gpd of water consumed for buildings permitted prior to 1/1/85; $125.00/1,000 gpd of water consumed for buildings permitted on or after 1/1/85 For each gallon per day required, the cost of the water system's infrastruc ture will increase by $0.253. This price is multiplied by the estimated gallons per day need for any development to determine the economic impact on the infrastructure. Impact fees for sample projects are then calculated as shown in Table 4 Critical Sewer Service Area Surcharge Assesses the developer for developing in rapidly growing areas. Sur- charges are either $0, $17.65, or $3,000/1,000 gpd of water consumed depending on the location of the development The variables that determine those fees include date of building permit, location of development in surcharge area, number of linear feet of pipe line, land use, size of development and the nature of the lines needed for the development. Those variables and established prices set the individual fees The effective sewer impact fee is then considered the sum of five parts whose components are shown in Table 5. The factor numbers in Table 6 show how many gallons of water per day are consumed by specific land uses. Each number in Table 6 was generated from the average consumption for each type of land use. As is indicated in the table, the factors depend on the land use measure, i.e. commercial struc tures are measured in terms of square feet, churches are measured in terms of seats. In effect, the sewer impact fee formula is Sewer Facilities The county already assesses a system of fees that together resembles an impact fee. The current system is based on treatment capacity and line ex- tension distance, and indirectly on density and location of development. Al- though the system is self-supporting, it receives some federal funding for projects. As federal money is reduced, altemative funding sources are needed. The Fulton County sewer system is an essential element in the county's infrastructure. A large portion of unincorporated Fulton County is served by the sewer system. In 1985, the sewer department served 36,639 households By nature of the service it provides, efficient operation and sufficient funding of the system is critical Sewer connection fees are presently collected from developers and placed in an carmarked fund. Some monies are used for operational expenses in practice (a violation of impact fee principles). Substantial monies are trans 24 25 TABLE 5. Sewer Impact Fee Components TABLE 7. Sewer Impact Fees Fee component Measure Without (1) Low High surcharge (4) (2) Project (1) surcharge (2) surcharge (3) Use fee Number of linear $18/lincar ft Number of linear ft $16/linear ft Number of lincar ft $20/linear f Number of units factor $125/1,000 gal Number of units factor ($0, or $17.65, or $3,000/1,000 gal) Assessment fee Exlension fee Single family home, 100 If 2 bedroom apartment 30 If/unit 100,000 sq ft office building, 300 If 100,000 sq ft shopping center, 600 If $5,434 $1,654 $18,700 $34,900 $5,349 S1,659 $21,200 $37,400 $6,244 $2,464 $78,700 $94,900 Availability fee Surcharge TABLE 6. Factor Table new and expanded roads, and signalization. Impact fees can be used to ra tionalize the current system of negotiating fees. The process begins with a capital improvement program for furture transportation facilities, and a de lineation of geographic areas of zones where greater or lesser transportation needs are present. The Fulton County Public Works Department prepares such a capital improvement document, called the Road Request and Con struction Program. This document, published annually, contains data and maps on all projects to be undertaken by the county in the next two years which will receive funding from the Public Works yearly transportation bud get. It also lists projects funded jointly by the county and other agencies and specifies which agencies are responsible for overseeing the projects. A road impact fee for Fulton County would first project the number of new residents and employees by SIC (standard industrial classification) over a period of time. These figures are then converted to trips by land use, using an appropriate Institute of Transportation Engineers factor for trip genera tion. For an example, see Table 8 Peak hour level of service standards would be set for each kind of road in the county road system. Current road capacity would be estimated. The current cost of new or expanded roads needed to serve projected demand for each major area of the county is estimated, as it has been in the county's current improvement plan. The projected trips for each land use is then di Land use (1) Measure (2) I bedroom apartment 135/unit 35/employee 5/seat 0.2/sq ft 100/residential unit 200/bed 100/om 35/employee 250/machine 100/bed 0.2/sq ft 270/unit 50/seat 20/person 0.15/sq ft 5/seat 0.05/sq ft Contact Sewer Department Auto services Churches Commercial Elderly housing Hospitals Hotel/motel Industrial Laundries Nursing homes Office Residential (new) Restaurants Schools Shopping center Theatres Warehouse Other TABLE 8. Trip Generation Factors by Land Use Category $ $ + + AF LF UF Sewer Impact Fee, = Land use EF Trips per 1,000 sq ft or residential unit (2) (1) GPD + U $ + GPD (TU) Commercial (5) 14.3 GPD Retail 58.2 Industrial where LF, linear feet of sewer line extended to project i; $/UF, S/AF $/EF dollars per linear ft for the use fee, access fee, and extension fee, respectively; GPD/U = gpd of wastewater generated per unit of project i TUtetal number of units of project i; $/GPD = dollar cost of providing new wastewater facilities in gpd; and $/GPD, = surcharge for location in surcharge arca j expressed in dollars per gpd. Example sewer facility impact fees are shown in Table 7. 6.23 Single-family residential Multi-family residential 10.0 6.6 TABLE 9. Cost per Trip by Geographic Area Geographic area (1) Budget (SMM) (2) Total number of trips (3) Cost per trip (4) Transportation Facilities At the present time, developers pay negotiated fees on a case-by-case basis to cover transportation costs associated with their development, including North Fulton South Fulton $32.283 153,572 233,558 391,887 $210.21 $24.009 $61.27 Sandy Springs $7.215 $18.4 26 27 Homework Assignment #3 Impact fees 1 of 1 Due: Tuesday, November 5 (at the beginning of class) Total points 20 points 1. Impact fee program on sewer facilities (20 points) The current population of Hyattsville is approximately 20,000 residents. Assume that during the next 20 years, the population is projected to increase to 30,000 residents. As a local government official for the city of Hyattsville, you must design an impact fee program to recoup the costs associated with additional sewer facilities that are needed to accommodate the projected new development Use the example described on pages 24-26 in Nelson et al. (1989) on the impact fee program in Fulton County, Georgia. In particular, use the information on sewer impact fee components (Table 5) and the factor table on average water consumed by land use type (Table 6). Make all calculations for the "high surcharge" scenario. Do not use Table 7 because the example described below has different linear frontage numbers for each land use type. Assume that the projected increases in new development are as follows: 2,800 people in 1 bedroom apartments (Note: Assume one person per apartment unit) 7,200 people in single-family homes (Note: Assume three people per housing unit on average) 5 million square feet of office space 4 million square feet of shopping center space Assume the following on linear frontage by land use type: 20 linear feet per 1 bedroom apartment 80 linear feet per single-family housing unit 200 linear feet per 100,000 square feet of office space 400 linear feet per 100,000 square feet of shopping center space a) For each land use type, what is the total amount collected from impact fees? b) For each residential land use, what is the impact fee per unit? c) For each non-residential land use, what is the impact fee per unit (i.e., 1 unit = 100,000 square feet of space)? d) New development is projected to increase costs for sewer facilities by $56.7 million Will you need to raise property taxes to help cover the additional sewer costs? If so, what proportion of the new sewer facilities costs will be paid from impact fees versus property taxes? TABLE 4. Sample Water Facility Impact Fees ferred to the bond sinking fund. The bond sinking fund is required to have enough money in it to make an annual payment on bonds that were issucd in previous years, to pay for a portion of outstanding bonds, and to pay for a portion of the improvement costs to the sewage systems. Remaining mon ies in the bond sinking fund are placed in the construction fund to be used for capital improvement projects such as expansion of existing treatment fa- cilities, construction of pump stations and interceptor lines, and other im provements to the sewage system. The surplus monies from the construction fund are placed in the renewal and extension fund, which uses the monies for other sewage system operating and capital costs. The sewer impact fee is based on a system that draws from five fees that are currently charged to developers. The one-time fees listed below are based on a 30-day month in order to standardize the fee schedule Land use Impact fee (2) (1) Single family home with 100 FF 2 bedroom apartment building unit with 30 FF per unit 0 story, 100,000 sq ft office building with 330 FF 100,000 sq ft community shopping center with 600 FF $826 $272 $8,069 $7,410 water treatment and storage facilities on a gallon-per-day basis; FF,= total front footage of project i along main waterlines, or total distance of project i boundary to the main waterline; and $/FF = estimated design and con struction cost of an average foot of main waterline, which is $7.50 presently in Fulton County (or $15 when the line is completely off-site or the line abuts only project property). To calculate the design and construction cost of new water treatment and storage facilities for a projected new population of 67,000 for whom no water facilities currently exist, the following procedure is used. Assume that average domestic consumption is projected to be 100 gallons per day (gpd) per person (also assume that fire reserves are to be 50 % of average daily domestic consumption). A two-million-gallon water tank is required along with treatment facilities. Assume the capital costs are $1.7 million. The price per gallon of domestic water delivered (not necessarily stored) is Sewer Use Fee Assesses the developer for the additional impact the development will have on the existing sewer system. The fee is $20.00/linear ft of existing outfall/ interceptor line crossing the property being developed. The fee is waived if the developer has to install the line Sewer Assessment Fee Assesses the developer for the cost of the existing sewer line. The fee is $18.00/linear frontage ft of outfall/interceptor line fronting the property being developed. There is no fee if the developer has to install the line 67,000 people x 100 gpd6,700,000 Sewer Extension Fee Assesses the developer $20.00/linear ft to extend the sewer line to de veloper's property. The fee is waived if the developer has to install the line =the number of gallons per day that must be delivered (3) $1,700,000 $0.253 price of I gpd delivered from the facility 6,700,000 (4) Sewer Availability Fee Surcharge assessed to the developer to recoup the cost of existing sewer facilities, principally treatment facilities. The fee is $62.50/1,000 gpd of water consumed for buildings permitted prior to 1/1/85; $125.00/1,000 gpd of water consumed for buildings permitted on or after 1/1/85 For each gallon per day required, the cost of the water system's infrastruc ture will increase by $0.253. This price is multiplied by the estimated gallons per day need for any development to determine the economic impact on the infrastructure. Impact fees for sample projects are then calculated as shown in Table 4 Critical Sewer Service Area Surcharge Assesses the developer for developing in rapidly growing areas. Sur- charges are either $0, $17.65, or $3,000/1,000 gpd of water consumed depending on the location of the development The variables that determine those fees include date of building permit, location of development in surcharge area, number of linear feet of pipe line, land use, size of development and the nature of the lines needed for the development. Those variables and established prices set the individual fees The effective sewer impact fee is then considered the sum of five parts whose components are shown in Table 5. The factor numbers in Table 6 show how many gallons of water per day are consumed by specific land uses. Each number in Table 6 was generated from the average consumption for each type of land use. As is indicated in the table, the factors depend on the land use measure, i.e. commercial struc tures are measured in terms of square feet, churches are measured in terms of seats. In effect, the sewer impact fee formula is Sewer Facilities The county already assesses a system of fees that together resembles an impact fee. The current system is based on treatment capacity and line ex- tension distance, and indirectly on density and location of development. Al- though the system is self-supporting, it receives some federal funding for projects. As federal money is reduced, altemative funding sources are needed. The Fulton County sewer system is an essential element in the county's infrastructure. A large portion of unincorporated Fulton County is served by the sewer system. In 1985, the sewer department served 36,639 households By nature of the service it provides, efficient operation and sufficient funding of the system is critical Sewer connection fees are presently collected from developers and placed in an carmarked fund. Some monies are used for operational expenses in practice (a violation of impact fee principles). Substantial monies are trans 24 25 TABLE 5. Sewer Impact Fee Components TABLE 7. Sewer Impact Fees Fee component Measure Without (1) Low High surcharge (4) (2) Project (1) surcharge (2) surcharge (3) Use fee Number of linear $18/lincar ft Number of linear ft $16/linear ft Number of lincar ft $20/linear f Number of units factor $125/1,000 gal Number of units factor ($0, or $17.65, or $3,000/1,000 gal) Assessment fee Exlension fee Single family home, 100 If 2 bedroom apartment 30 If/unit 100,000 sq ft office building, 300 If 100,000 sq ft shopping center, 600 If $5,434 $1,654 $18,700 $34,900 $5,349 S1,659 $21,200 $37,400 $6,244 $2,464 $78,700 $94,900 Availability fee Surcharge TABLE 6. Factor Table new and expanded roads, and signalization. Impact fees can be used to ra tionalize the current system of negotiating fees. The process begins with a capital improvement program for furture transportation facilities, and a de lineation of geographic areas of zones where greater or lesser transportation needs are present. The Fulton County Public Works Department prepares such a capital improvement document, called the Road Request and Con struction Program. This document, published annually, contains data and maps on all projects to be undertaken by the county in the next two years which will receive funding from the Public Works yearly transportation bud get. It also lists projects funded jointly by the county and other agencies and specifies which agencies are responsible for overseeing the projects. A road impact fee for Fulton County would first project the number of new residents and employees by SIC (standard industrial classification) over a period of time. These figures are then converted to trips by land use, using an appropriate Institute of Transportation Engineers factor for trip genera tion. For an example, see Table 8 Peak hour level of service standards would be set for each kind of road in the county road system. Current road capacity would be estimated. The current cost of new or expanded roads needed to serve projected demand for each major area of the county is estimated, as it has been in the county's current improvement plan. The projected trips for each land use is then di Land use (1) Measure (2) I bedroom apartment 135/unit 35/employee 5/seat 0.2/sq ft 100/residential unit 200/bed 100/om 35/employee 250/machine 100/bed 0.2/sq ft 270/unit 50/seat 20/person 0.15/sq ft 5/seat 0.05/sq ft Contact Sewer Department Auto services Churches Commercial Elderly housing Hospitals Hotel/motel Industrial Laundries Nursing homes Office Residential (new) Restaurants Schools Shopping center Theatres Warehouse Other TABLE 8. Trip Generation Factors by Land Use Category $ $ + + AF LF UF Sewer Impact Fee, = Land use EF Trips per 1,000 sq ft or residential unit (2) (1) GPD + U $ + GPD (TU) Commercial (5) 14.3 GPD Retail 58.2 Industrial where LF, linear feet of sewer line extended to project i; $/UF, S/AF $/EF dollars per linear ft for the use fee, access fee, and extension fee, respectively; GPD/U = gpd of wastewater generated per unit of project i TUtetal number of units of project i; $/GPD = dollar cost of providing new wastewater facilities in gpd; and $/GPD, = surcharge for location in surcharge arca j expressed in dollars per gpd. Example sewer facility impact fees are shown in Table 7. 6.23 Single-family residential Multi-family residential 10.0 6.6 TABLE 9. Cost per Trip by Geographic Area Geographic area (1) Budget (SMM) (2) Total number of trips (3) Cost per trip (4) Transportation Facilities At the present time, developers pay negotiated fees on a case-by-case basis to cover transportation costs associated with their development, including North Fulton South Fulton $32.283 153,572 233,558 391,887 $210.21 $24.009 $61.27 Sandy Springs $7.215 $18.4 26 27