November 8, 2024

LAU proposes ‘staggering’ fee increases

Under a newly proposed Land Use Assumption and Infrastructure Improvement Plan, fees in the City of Buckeye could skyrocket, the largest increase reaching 8,623%. At the Oct. 15 City Council meeting, council members were presented with the first draft of the LAU and IIP proposal. The fees aren't set in stone yet, but the suggestions were presented as the inevitable growing pains of a growing city.

 

WHAT ARE LAUS AND IIPS?

Land Use Assumption (LAU) fees project changes in land use over time. The proposed LAU looks at a 10-year growth period and is required to be updated every five years. It utilizes measures such as population and density to assess the impact of infrastructure costs for projected growth. It accounts for numerous variables: population and employment, housing units and nonresidential buildings, traffic variables, fire, parks, the library, police, street infrastructure, water and waste water services. All intersect with one another.

A graph showing how different aspects of life in the city intersect with one another to create land use assumption fees. [City of Buckeye]
Infrastructure Improvement Plans accommodate LAUs to best project how to support infrastructure based on a city’s growth and development. 

When it comes to growth in Buckeye, the formulas are massively exponential, said Chief Financial Officer William Kauppi. The population is expected to increase by nearly 86,000 residents in the next 10 years. Employment is expected to increase by just under 24,000 in that same time period.

"We have to then decide, where is the direct impact?" said Kauppi. "Based on those assumptions, we can forecast our infrastructure improvement plan."

Over the course of the past year, he and his team have collected data and prepared the LAU and IIP draft, presented to City Council on Oct. 15. The review was conducted by Maryland-based fiscal, economic and planning consulting firm TischlerBise, which the city hired for $16,780. Much of the data was collected utilizing statistics from the Maricopa Association of Governments along with recent building trends and planned or entitled developments.

 

PROPOSED ADJUSTMENTS

Adjustments are individually evaluated based on infrastructure type: Single-family residential, multi-family residential, commercial, industrial and office. Under the proposed LAU adjustment, increases are across the board.

  • Single-family residential homes
    • Utilities: 43% increase
    • Total impact fees: 58% increase
  • Multi-family residential
    • Utilities: 4,347% increase
    • Total impact fees: 445% increase
  • Commercial
    • Utilities: 1,393% increase
    • Total impact fees: 344% increase
  • Industrial
    • Utilities: 8,623% increase
    • Total impact fees: 2,564% increase
  • Office
    • Utilities: 1,255% increase
    • Total impact fees: 276% increase

These numbers are largely because of the rising cost of infrastructure since the last LAU in 2020, Kauppi said.

"Seven years ago was when they would have started the last report," he said. "Infrastructure has grown tremendously. A lot of these costs are related to the cost of infrastructure."

The follow changes were proposed current draft, contributing to the increases:

  • Parks and Recreation: Fee calculations will be determined by area
    • Citywide, regional parks and regional trails were removed from the LUA.
    • In the north, community park land was removed and community park amenities were added.
    • In the south, the pool fee was removed.
  • Library: A city-wide fee is implemented. The fee money paid will stay within the zone of the payee, however.
  • Buckeye Fire Medical Rescue Department: Additional fire station service areas were added along with a fire facilities component
  • Streets: Three services areas are identified in the draft, including a new area east of MC-85 and south of the I-10. Fees decrease the further development is located from the I-10.
  • Water:
    • Water use measurement was changed from by meter size to per gallon.
    • Average daily water consumption for single- and multi-family homes was decreased from 113 gallons per person to 94 gallons per person.
  • Wastewater: Flow adjustments decreased from 80 gallons per person to 54 gallons per person.

Kauppi said the adjustments to water and wastewater came about as the result of his team reviewing 14 months worth of bills to determine the usage demand of each area. Kauppi also noted that the projected assumptions are on the high end, especially when it comes to water use.

"We're trying to get a more accurate reflection of how much water everyone actually uses," he said.

 

'STAGGERING' FEES

City Council was silent for a few moments following the presentation before Mayor Eric Orsborn spoke, expressing concerns about the fees and worry that the cost of infrastructure would be "bore on the back of residents."

"Some of these fees are pretty staggering," he said. "Are we going to end up with difficulty in attracting business because of the fees we're looking at?"

Economic Development Director Suzanne Boyles addressed the concern. The fees listed on the slides, she told council, are max-day engineering standards. A sort of "worst case scenario." When a new client comes to town, however, they may conduct their own usage evaluation and submit it to the city to adjust their fees. It's a delicate balance of attracting new industries to the community while also providing appropriate infrastructure while also ensuring infrastructure fees are scaring away new industries.

"A lot of clients we are working with will submit working reports to see what the impact to their system is," Boyles said. "We are working with them to understand it's better for them to do their own study. ... That is the balance we are trying to strike to ensure this is not negatively affecting our ability to attract new business."

Because the city is not entirely built out, Orsborn said, expanding into new areas often requires more infrastructure to be built than other cities in the Phoenix Metro area. This contributes to some of the exponential increases, he agreed.

"It's not a deal breaker or a reason to vote down what we are talking about. It's that we are understanding what we're attempting to do here," he said. "It's difficult to compare us with other cities because, generally, the other cities are stepping onto the end of a pipe and extending it out and we're not doing that here. There are a lot of new systems that we're putting in place."

 

NEXT STEPS

During the public comment portion of the Oct. 15 presentation, James Ashley, director of municipal affairs for the Home Builders Association of Central Arizona, provided input. He commended the city's transparency in its LAU draft process, calling it "best practice."

"We appreciate the very recent adjustments made when it comes to water usage," he said. "There are some pending concerns and we are continuing to work with staff on those concerns."

The Oct. 15 meeting was the first time the draft had been presented to City Council. It is a working plan that will undergo further deliberation, discussion and potential changes. The city is on a deadline to complete it, however, and the implementation timeline is as follows:

  • Nov. 19, 2024: Adoption of LUA and IIP
  • Nov. 20, 2024: Advertise development fees
  • Jan. 7, 2025: Public hearing for development fees
  • Feb. 18, 2025: Adoption of development fees
  • May 5, 2025: Fees go into effect

 

FURTHER DETAILS

The following two sections provide a break-down of Buckeye’s current and proposed fees in comparison to other Phoenix Metro area cities in addition to individual break-downs of fee increase per infrastructure type.

The full LAU proposal can be viewed HERE.

The full Oct. 15 presentation can be viewed HERE.

 

FEE COMPARISON

Currently, Buckeye’s impact fees are low in comparison to other area cities, said Kauppi, as evidenced by fee comparisons he provided to council. The adjustments, if accepted, would skyrocket the city's fees into, in some cases, toward the highest in the Phoenix Metro area. The following graphs, provided by the City of Buckeye, demonstrate Buckeye's current ranking with the yellow bars and proposed ranking in the green bars.

 

SINGLE FAMILY RESIDENTIAL

The proposed LAUs for single family residential homes would increase the total impact fees by 58% and total utilities by 43%.

MULTI-FAMILY 

The proposed LAUs for multi-family residential developments would increase the total impact fees by 445% and total utilities by 4,347%.

COMMERCIAL

The proposed LAUs for commercial development would increase the total impact fees by 344% and total utilities by 1,393%.

INDUSTRIAL

The proposed LAUs for industrial development would increase the total impact fees by 2,564% and total utilities by 8,623%.

OFFICE

The proposed LAUs for office development would increase the total impact fees by 276% and total utilities by 1,255%.

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