To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Title
Discussion/Direction: Impact Fee Study
Body
________________________________________________________________________________
Executive Summary
Council, we have several Council agenda items for consideration related to funding transportation related capital improvements.
Funding of Transportation Related Capital Improvements
- General Background
- Request for new Impact Fee Study
- Request for Crystal Valley Interchange Recoupment Fee Resolution
- Adoption of Revised Five-Year Capital Improvement Plan
- Resolution Authorizing Design Contract for Roundabout at West Loop Road
Background
Our funding for these important capital items has been stressed in recent years with a combination of a slow-down in impact fee growth and a steady increase in the cost of larger scale road and intersection improvements. The slow-down in impact fee growth is related to the recent slow-down in building permits larger attributed to both interest rate increases and a small inventory choice of building sites for single family detached houses. Transportation capital impact fees and grant revenue from the County, CDOT or DRCOG are the primary funding sources for Town growth-related road improvements.
Our 2040 Transportation Master Plan (TMP) sets out the necessary capital road and intersection projects that are viewed as necessary to maintain existing levels of service within the community as we continue to grow with additional traffic demands. Staff annually evaluates available and projected revenues and recommends a 5-year capital improvement plan and forecasts beyond that to provide realistic availability to implement TMP projects within the community. We also actively seek funding opportunities from the County, State and Federal governments to provide necessary additional resources for projects.
We are seeking Council approval of two items related to revenue for transportation projects.
Request to initiate a new study on impact fees
One item is for Council approval to send out a Request for Proposals for an Impact Fee Study. This study would not only examine the impact fees for transportation, but also examine the fees for fire capital, police capital, parks capital, and municipal facilities capital needs. Our first impact fee study goes back to 2002, with additional independent studies in 2005, 2010, 2015, and 2018. These are both significant revenues for the Town and costs imposed on development. We have attached a chart showing the growth of these fees in recent years. In reviewing these fees, it is important to note a number of attributes of impact fees. The impact fees follow the general Town philosophy that growth should bear a significant burden for the costs (e.g., ‘impact’) placed on Town services. The alternatives to impact fees - higher property tax or sales tax - are generally not viewed positively by community members. These attributes of impact fees are why many Colorado municipalities rely on these fees to fund important capital costs for a community. (Pursuant to State law, impact fees cannot fund operational costs of municipalities such as police or fire salaries.)
The primary goals of the impact fee study are to:
• Assess the Town capital costs associated with new development and the level of impact fees (for capital costs) that will be charged, based on a reasonable nexus, to recover those costs.
• Develop an exaction methodology that allocates the cost of infrastructure based on a reasonable nexus to the developments that benefit.
• Develop an alternative allocation methodology for the transportation fund that reasonably provides a way of assigning this revenue to specific regional projects, as well as that retains the current and past practice of a single transportation fee Town-wide.
• Identify an integrated approach to the concurrent use of impact fees, and exactions
A community cannot simply pull a number out of the air and use it as an impact fee - it can’t simply borrow a fee number from an area community as copy it for their jurisdiction. Instead, the impact fee must have a strong relation to the projected costs of capital infrastructure related to growth demands for an existing service. The final study and recommendations would be brought back to Town Council, with any recommended changes subject to Council consideration and approval. The Town staff would seek involve interested stakeholders in key aspects of the study and presentation of recommendations.
Request to Adopt Resolution which Adopts a Policy for the Recoupment of Costs Incurred by the Town in the Construction of the Crystal Valley Interchange
As Town Council knows, the Crystal Valley I-25 interchange is a substantial undertaking of the Castle Rock community. Its $145 million price tag was the result of significant efforts over a number of years to assemble the necessary funding to make the project a reality. In addition to funding from a federal grant, DRCOG and Douglas County, the Dawson Trails metro district contributed $50 million for the project and earlier developments on the east side of I-25 provided exaction contributions at the time for their initial developments. The Town has contributed the remaining funding for the project, has assumed management of the construction and will have maintenance responsibilities set out by CDOT going forward. There are likely to be properties outside of current Town boundaries near the interchange that will likely seek to develop within the Town in the coming years. In order to establish a fair baseline for future exaction requirements to seek recoupment from these properties the Town engaged Jacobs Engineering (the same firm that designed the interchange) to develop a fair methodology for exactions from properties that have not contributed toward the interchange. (There will also be some properties already in the Town near the interchange that have not contributed to the project that make seek development that are covered by this policy as well.) The policy does not require development on these properties, it only seeks to recoup a fair exaction if development occurs. The exaction is based on the location of the property and any future traffic generation from a proposed development, and would be included in development agreements associated with future annexations or would be included in revised development agreements for property already within Town boundaries.
Staff recommends adoption of this policy by resolution.
Resolution Amending the 2026-2030 Five-Year Capital Improvement Program for the Town of Castle Rock
As discussed above, the Town’s 5-year Capital Improvement Program (CIP) sets out the priority of projects within the community based on projected revenues. Staff is recommending a change to the existing CIP to incorporate two new projects: a roundabout at West Loop Road and Crystal Valley Parkway, and a study on future improvements necessary for Founders Parkway. Staff sees these as important priorities that, along with other funding in the five-year CIP, represent the top priorities for funding.
It is important to note that we have several road and intersection improvements around the community that we are unable to currently fund. The list of these projects highlights the importance of the two earlier items for a new impact fee study and the CVI recoupment fee. List of prominent transportation capital needs that are unfunded through the decade:
• North Meadows extension widening and bridge widening
• Meadows Parkway widening and bridge widening
• Founders Parkway improvements
• Highway 86 from 4 corners to Town boundaries
• Plum Creek Parkway improvements from Wolfensberger to I-25 *
• Connection of Atchison to new road on Miller’s Landing *
• South Wilcox improvements
• Perry Street connection to South Wilcox
• Dawson Trails Blvd from Dawson Trails to Plum Creek Parkway*
• US Highway 85 improvements toward Castle Pines
• Several number of intersections for either traffic signal or roundabout improvements*
*Development requirements for participation in funding may/will assist cost
Staff recommends adoption of the revised Transportation Five Year CIP
Resolution Approving a Services Agreement with Kimley-Horn and Associates, Inc., for the Design of the West Loop Road Roundabout Project
Staff recommends approval of this transportation project.
Proposed Motion
“I move to direct staff to proceed with the Impact Fee Study.”
Attachments
Attachment A: DRAFT Request for Proposals - Impact Fee Study