To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Title
Ordinance Amending Chapter 3.16 Adding a New Section 3.16.005 Entitled Authority; Amending Section 3.16.030 Adjusting the Development Impact Fees for Residential and Non-Residential Uses; and Adding a New Section 3.16.035 Entitled Inflation (Second Reading - Approved on First Reading on September 4, 2018 with a vote of 6-0)
Body
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The Ordinance was approved on first reading on September 4, 2018 with a vote of 6 to 0 with changes as follows:
Town Staff has implemented a change to the index used to determine the inflationary factor for the Parks and Recreation, Police, Fire, and Municipal Facilities Fees. In the first reading of the Ordinance, the inflation factor was stated as the Consumer Price Index (CPI) for all categories except for the Transportation Impact Fee. Upon further discussion, Staff has identified the following inflation indices as more specific to each fee type:
Parks and Recreation - The Denver Construction Cost Index published by the Engineering News Record
Police - The Denver Building Cost Index published by the Engineering News Record
Fire - 40 percent of the total index based on the Denver-Aurora-Lakewood Consumer Price Index for all urban consumers and 60 percent of the total index based on The Denver Building Cost Index published by the Engineering News Record
Municipal Facilities - The Denver Building Cost Index published by the Engineering News Record
The Transportation Impact Fee will remain as stated in the Ordinance, first reading.
Executive Summary
The Town collects impact fees on new construction projects to ensure the Town’s levels of service to the community can be maintained as Castle Rock continues to grow. The Town updates these and other fees periodically to ensure that they are aligned with market conditions.
Staff engaged Economic & Planning Systems, Inc. (EPS) to perform an assessment of impact fees for non-utility areas for the Town. This recent analysis concluded that the Town should be charging significantly higher impact fees based upon the estimated future project needs of a high-growth community and higher construction costs.
Staff has met with and discussed the needed fee increases on multiple occasions with the development community before presenting a recommended fee structure to Council at the work session last month. At that time, Staff indicated to Council that an ordinance to implement the proposed fees was in process which gradually phases the proposed fees up closer to needed levels over a multiyear period. The proposed changes to the impact fees were also included with the August 21 presentation of the 2019 Budget to Council. Council is being asked to approve that ordinance (Attachment A) on first reading tonight.
If impact fees are not increased, choices include 1) providing reduced levels of service to the community and/or 2) asking voters to provide for additional revenue sources to address the capital needs of a growing community, such as a property tax increase.
Staff Recommendation
In order to ensure levels of service can be maintained as the Town grows, Staff recommends Council approve the Ordinance as presented.
Proposed Motion
“I move to approve the Ordinance as introduced by title on second reading.”
Attachments
Attachment A: Ordinance - Second Reading
Attachment B: Impact Fee Nexus Study: Proposed Castle Rock 2019 Impact Fee Program, EPS
Attachment C: Staff Report - Transportation CIP Forecasted Needs
Attachment D: Staff Report - Parks and Recreation CIP Forecasted Needs