1. Town Council Strategic Planning Session
Funding the Town’s Transportation Infrastructure Improvement Plan (IIP) – A Summary of Funding Sources
Town Council Strategic Planning Session
February 25, 2017

2. Purpose of Presentation
Identify Frequently Used Funding Sources
Comparison of Other Cities
How is the Town Different?
Review Impact Fees
Why are they Different?

3. 1. Funding Sources

4. Frequently Used Funding Sources
Comparative Matrix on Next Slide
Each City Uses Multiple Funding Sources
Combination of Sources Vary
Sources are Paid By
Existing Residents and Businesses
Future Residents and Businesses
Visitors

5. Comparison of Frequently Used Funding Sources
Queen
Creek
Chandler
Gilbert
Mesa
Operating Budget
Yes
Impact Fees No
Dedicated Construction Sales Tax
Proposition 400
Gas Tax (HURF)
Voter Approved G.O. Bonds (paid from Property Taxes)
Dedicated General Sales Tax

6. How is the Town Different?
Operating Budget Capacity
Opportunity for Town
$6.5M Placeholder for:
Debt Payments / Pay-As-You-Go Project Funding
Operating Costs for New Roads Constructed by the Town and Private Development
Other Uses (i.e. Parks Master Plan)

7. How is the Town Different? (concluded)
Dedicated Construction Sales Tax (vs. Dedicated General Sales Tax)
Town: 2% on all Construction Activity (Narrow Base)
Mesa: 0.3% on all Taxable Activity (Broader Base)
Dedicated Construction Sales Tax Revenues are a Direct Reduction from Impact Fees (discussed later)

8. How is the Town Different? (concluded)
Proposition 400
0.5% Dedicated Transportation Sales Tax in Maricopa County
Most Cities in Maricopa County Receive Prop 400 Funding – QC Does Not
Represents Significant Funding for Projects
Mesa: $47M
Peoria: $15M

9. How is the Town Different? (concluded)
Gas Tax (HURF)
The Town uses 100% of our Revenues for Operations and Pavement Preservation - Not New Projects
Because Street Expenses Exceed Revenues Its Not an Issue whether Used for Operations or Projects

10. How is the Town Different? (concluded)
Voter Approved G.O. Bond (Paid from Property Taxes)
Approach
Citizen Bond Committee Formed to Develop a List of Projects
Project List to Ballot for Vote
Property Taxes Set to Cover Annual Debt Service Payment

11. 2. Impact Fees

12. Impact Fees City Comparison on Next Slide
Our Current Fee is Low in Relation to Others at $1,263
Fees Vary Widely for Multiple Reasons
Remainder of Presentation Discusses the Reasons for the Variety

13. Comparison of Impact Fees (Single Family)

14. Pinal County (North Central) is a Good Comp to QC
Single Family Fee is $7,978
Same Level of Service as QC
91 New Lane Miles
$90M Total Cost
49% Growth Related

15. Why Do Impact Fees Vary? Major Reasons are:
Amount of Infrastructure Remaining to be Built (Age of City)
Credits (Fee Reductions)
Included Costs
Number of Service Areas
All Other

16. 1. Amount of Infrastructure Remaining to be Built
“Younger” Cities Tend to Have Higher Fees because they are Still Building a Transportation System
“Young Cities”: Queen Creek, Apache Junction, Pinal County

17. 2. Credits (Fee Reductions)
With new Legislation in 2012, Impact Fees Must be Reduced by Other Sources (Credits) which include:
Dedicated Construction Sales Tax
Prop 400
Gas Tax (HURF)

18. Dedicated Construction Sales Tax
Direct Reduction of Growth Costs Before Impact Fees Calculated
Illustrated Below
$25M Reduction to QC’s Impact Fees over 10-Year Period
Previous
Method
Current
Total Growth Costs
$115M
Less Dedicated Construction Sales Tax
- $0
- $25 M
Amount From Impact Fees
$115 M
$90M

19. Prop 400 0.5% Dedicated Transportation Sales Tax in Maricopa County
All Cities in Maricopa County Receive Prop 400 Funding Except QC
Represents Significant Funding for Projects
Mesa: $47M
Peoria: $15M

20. Gas Tax (HURF)
Many Cities Use a Portion of Their Annual Gas Tax Revenues for Growth Related Projects either as Pay-As-You-Go or for Debt Service Payments
Example: Phoenix, Gilbert, Mesa, Chandler

21. 3. Included Costs Comparative Matrix on Next Slide
Types of Costs Included in Fee Vary
Most Include Arterial Streets
Exception: Gilbert (Traffic Signals Only)
Mixed Results re. Inclusion of Right-of-Way Costs

22. 3. Included Costs (concluded)
Major Arterials
Collector Streets
Traffic Signals
Right-of-Way
Support Facilities
Apache Junction
Yes No
Chandler
Gilbert
Peoria
Phoenix
Pinal County
Queen Creek

23. 4. Number of Service Areas
Comparative Matrix on Next Slide
The larger the Geographic Size, the More Likely Multiple Service Areas Exist (Nexus)
Examples: Phoenix, Peoria, Pinal County
Pinal County: Excluded Eastern Portion due to Low Population and Insignificant Development

24. 4. Number of Service Areas (concluded)
Apache Junction 1
Chandler
Gilbert
Peoria 3
Phoenix
Pinal County 4
Queen Creek

25. 5. All Other Other Factors that Affect Impact Fees Include:
Large Projects Funded by Alternative Methods such as
Community Facility Districts
Improvement Districts
Developer Agreements
Developer Contributions

26. 5. All Other (continued) Stormwater Impact Fee
Includes Drainage Facilities, Culverts, and Bridges that are Otherwise Included in the Transportation Impact Fee
Example: City of Phoenix
Stormwater Utility: Flagstaff, Oro Valley

27. 5. All Other (concluded) Project Inflation Included
Timing of Last Update
Method Used to Calculate Fee
Set at Legally Maximum Amount

28. How Will the Town Pay for the IIP?
Street Operating and Replacement Costs
Feb 1
Cash Flow Projections
Feb 15
Funding Options
Comparison to Other Cities
Feb 25
Calculating the Updated Impact Fee
March 1

29. Questions and Comments