Fountain Hills holds work session on updated land‑use assumptions, consultants flag big jump in potential development impact fees

Fountain Hills town staff and consulting firm TischlerBise presented a draft update to the town's five‑year land use assumptions and Infrastructure Improvements Plan on June 3, outlining how higher construction costs and revised growth projections could substantially raise development impact fees for streets, parks and fire services.

The work session, presented by a town staff member identified as Paul and Ben Griffin of TischlerBise, was intended as an informational briefing; no ordinance or fee schedule was adopted. Paul told the council the town has charged development impact fees for about 25 years and must update the land use assumptions every five years under Arizona law.

Consultant Ben Griffin reviewed how impact fees work, the required legal demonstrations of need and benefit, and three methods commonly used to compute fees: cost recovery, incremental (present level of service), and plan‑based (future CIP). Griffin said the draft uses a single townwide service area and an incremental approach for most components, but the Shea Boulevard widening is handled as a plan‑based street project.

Griffin showed residential occupancy factors (single‑family 2.23 persons per household, multifamily 1.58) and MAG and ITE demand factors used to translate projected housing and square feet into persons, jobs and vehicle trip demand. Using the town's 2025 baseline (about 28,000 peak population; ~14,500 housing units), the consultants projected roughly 1,300 new housing units over 10 years, adding roughly 2,500 peak population and about 75,000 square feet of nonresidential development.

On fire services, the presentation showed three fee components: facilities, apparatus and equipment. Maintaining current levels of service would produce roughly 1,300 additional square feet of fire facilities and about $1.3 million in growth‑related cost, plus smaller apparatus and equipment totals. Griffin illustrated how a proposed new fire facilities component could add roughly $1,000 to the single‑family fee.

For parks, the draft assumes the town will primarily invest in improving existing parkland rather than buying new land; consultants estimated a need to improve about 8.5 acres at roughly $40,000 per acre and to add about 92 amenity units, producing an estimated $4.1 million in fee‑eligible park amenity costs and raising an example single‑family parks fee to about $4,000 (from roughly $1,900 now).

The largest single change came in streets. Consultants showed a plan that scales Shea Boulevard to 3.94 lane miles costing roughly $29.3 million, of which about $8.8 million would be growth‑share after credits and MAG adjustments. The draft factors the town's existing $900,000 fund balance and current MAG participation; because construction cost estimates for Shea have risen sharply since the last update, the street component drives most of the proposed fee increase. Griffin and staff noted that if the town adopted the IIP as presented, revised fees could take effect in April 2026 after required public hearings and adoption steps.

Council members asked multiple technical and policy questions about: methodology choice (incremental versus plan‑based), the effect of limited developable land on phasing, whether fees could be held at current levels by readopting the existing study, where credits or developer‑provided parkland would be applied, and how the single‑family versus multifamily fee gap arises primarily from trip‑generation differences used for streets. Griffin said much of the increase reflects nationwide construction cost growth since the town's last update in 2020 and that many peer jurisdictions that updated more recently now show higher fees.

Paul and staff emphasized the process steps still to come: stakeholder outreach during the 60‑day advertisement window, a public hearing on land use assumptions and the IIP likely in September, and a separate public hearing and adoption step for the development fees later in the fall and winter. If the schedule holds, an adopted fee ordinance could take effect April 2026.

The session ended with council affirmation that the draft should be distributed to stakeholders and presented in public hearings; staff and the consultant will return with the draft documents and a recommended schedule for public outreach and formal adoption.

Ending: Staff said they will advertise the draft, conduct stakeholder outreach during the 60‑day window and return with public‑hearing materials in September; the council did not take action at the work session and directed staff to continue outreach and bring the IIP and associated fee schedule back for formal hearings.