El Mirage council reviews draft development-impact fees, asks staff to model a second fire station and community center

Carson Vice, a consultant with Tishler Bice, told the El Mirage Common Council on June 19 that the firm’s draft development-impact fee study is preliminary and subject to change after further vetting and council feedback.

"The numbers you see are preliminary," Vice said, warning the council that staff had only seen the draft in early May and that the final package will include three required work products: land-use assumptions, an infrastructure improvement plan and the formal Development Fee Report.

The study presented draft fee amounts and the methodologies used to calculate them — including buy‑in, consumption and plan‑based approaches — and applied those methods to projected growth over a 10‑year horizon. Vice said the team used a growth projection of roughly 900 new residents, about 5,500 net new jobs and about 5.3 million square feet of new nonresidential development for the study’s baseline calculations.

Why it matters

Development impact fees are one‑time charges intended to recover the growth‑related portion of the cost of infrastructure. Under Arizona law and the consultant’s interpretation, the fees may be used only for capital capacity tied to new development — not routine operations or existing service shortfalls — and must meet legal tests of need, benefit and proportionality.

Details and draft totals

Vice laid out draft, category‑by‑category calculations and multiple examples the council could expect in the written report. Using the draft assumptions presented at the work session, the consultant estimated the following draft fees (all described by Vice to the council as preliminary and subject to credits, methodological adjustments and further council direction):

- Parks: Approximately $2,149 per single‑family dwelling unit and about $19.29 per multifamily unit; nonresidential rates ranged from roughly $22 to $211 per 1,000 square feet depending on land use. - Police: Draft residential fees of roughly $1,518 per single‑family unit and $1,363 per multifamily unit; nonresidential fees were higher for retail and lower for industrial or office uses (examples shown by draft: $2,469 per 1,000 sq. ft. for some commercial types). - Fire: Draft residential fees of about $1,246 per single‑family unit and $1,119 per multifamily unit; nonresidential fees varied by use (examples in the consultant slides included commercial at about $1,996 per 1,000 sq. ft.). - Streets (buy‑in for three road improvements previously built): The consultant estimated a draft charge of roughly $1,153 per single‑family unit and $912 per multifamily unit, based on a cost‑per‑vehicle‑trip allocation of the city’s past $19.5 million investment in three roadway projects and projected 2035 trip totals. - Wastewater (plan‑based for a new equalization basin included in the city’s recent rate study): Draft fees were shown by meter size; a 3/4‑inch meter (typical single‑family) example produced about $1,137.

Vice and staff stressed these numbers did not yet include credits for dedicated revenues or prior developer contributions. Robert (city staff, introduced at the session as the staff lead) reminded the council that credits must be calculated where a project’s cost was already covered in whole or part by bond proceeds, developer contributions or other dedicated revenue streams.

Council questions and concerns

Council members pressed for clarity on who pays, how credits and bonded debt affect fees, and whether impact fees will disproportionately affect small businesses or affordable housing projects.

Council member Dorsey questioned vehicle‑versus‑motorcycle averaging in the police vehicle calculations; Vice said the vehicle costs are weighted averages across the fleet. Several members asked whether fees are paid at permit issuance (the consultant said they are typically paid at building‑permit stage and most jurisdictions require payment prior to certificate of occupancy). The consultant advised against spreading fee payment over time.

Council members also noted that much of the city’s near‑term growth will be industrial/data centers south of Peoria Avenue (Microsoft, Compass and other parcels were discussed). Vice said data centers lack a perfect category in industry standard trip‑generation tables and the study currently treats them conservatively, often as a low‑intensity industrial use; he said Tishler Bice would research defensible classifications if council requests it.

Affordable housing and exemptions

Several council members raised concerns that flat fees could increase housing costs for small infill or affordable projects. Vice offered two common mitigations: a progressive residential fee tied to dwelling‑unit size (smaller homes pay less) and narrowly targeted fee waivers or subsidies financed from other city sources. He cautioned that waivers typically require a city policy and an offset to ‘‘make the program whole’’ from another fund if fees are waived for a defined purpose (for example, a Habitat for Humanity project).

Staffing, administration and compliance requirements

Robert and Vice warned council that administering impact fees requires ongoing staff capacity, separate accounting for each fee category, periodic audits and periodic updates to the infrastructure improvement plan. Vice said jurisdictions commonly assign fee oversight to finance staff and that an annual audit and multi‑year plan updates are standard; if the city does not meet reporting requirements it may be required to stop collecting fees until compliance is restored.

Council directions and next steps

Though no formal ordinance or vote was taken, the council gave staff and the consultant several specific directions to include in the next draft report and to model for the council’s review:

- Add a southern fire station (smaller/substation footprint discussed) to the Infrastructure Improvement Plan so the consultant can show how impact fees would contribute (Vice said a consumption‑based approach yields an estimated 2,970 sq. ft. additional demand over 10 years on the draft numbers, but the council discussed a smaller 2‑bay substation in the 7,000–9,000 sq. ft. range as a possible model). Fire Chief asked staff to research recent comparative station plans from nearby jurisdictions for sizing guidance. - Model a community/teen center (the council discussed a community center with up to 3,000 sq. ft. of impact‑fee‑eligible space under Arizona law) and show how impact fees could fund the eligible portion. - Recalculate fees taking into account credits for prior developer contributions (Microsoft, TI Cold, Dermody were named as possible credit sources) and any existing bonded debt that would require a credit against fees. - Return a revised draft fee schedule and the three required written work products (land‑use assumptions, Infrastructure Improvement Plan, and Development Fee Report) in about one month, with alternative scenarios (including a progressive, size‑based residential fee and specific project impacts such as the Housing Authority redevelopment and a 20,000 sq. ft. medical expansion).

What was not decided

Council did not adopt an ordinance, set final fees or approve any funding transfers. Multiple council members expressed caution about potential negative impacts on small businesses and on truly affordable housing. The consultant and staff repeatedly stressed that the figures shown were draft calculations that will change after credits, bond offsets and council‑requested projects are incorporated.

Ending

Carson Vice said the firm will return with revised, documented fee schedules and the three statutory work products after the council’s guidance and staff’s information on outstanding bonds and developer contributions. Robert said the city will coordinate required follow‑up (outstanding debt details, Microsoft/other developer contributions and targeted project scopes) and return the revised materials for the council’s formal consideration.

Quotes

"Impact fees are a one‑time payment," Carson Vice, the consultant, said. "They're designed to offset new developments' impact on different infrastructure systems."

"The numbers you see are preliminary," Vice added, noting staff had reviewed early drafts only recently.

"There’s a lot of back‑end work that has to go into it," Robert said, urging council members that the city will need additional finance capacity and annual audit work to administer any fee program.

Sources and documents

The council referenced Arizona Revised Statutes (noted in the presentation as "section 9‑4‑603" in the meeting) as the governing authority for development impact fees and discussed the statutory changes made in February 2012 that limit eligible facilities and added reporting/spend‑down requirements.

Upcoming: Vice and staff will return with updated calculations, credits and project‑level modeling for the council’s review in approximately one month.