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HomeMy WebLinkAboutAgenda - 09-06-2016 - 8-a - School Impact Fee Studies – Receive Draft Reports 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 6, 2016 Action Agenda Item No. 8-a SUBJECT: School Impact Fee Studies — Receive Draft Reports DEPARTMENT: Planning and Inspections ATTACHMENT(S): INFORMATION CONTACT: 1. Draft School Impact Fee Study for Craig Benedict, Planning Director, 245- Chapel Hill — Carrboro City Schools 2592 2. Draft School Impact Fee Study for Perdita Holtz, Planner III, 245-2578 Orange County Schools 3. Table Showing Maximum Supportable Impact Fees at Various Percentage Levels 4. Current School Impact Fees PURPOSE: To receive the draft School Impact Fee Studies for both school districts, hear a presentation by the consultant and staff, and authorize the next steps towards adopting updated school impact fees. BACKGROUND: In the summer of 2015, Orange County contracted with TischlerBise, Inc. to perform school impact fee studies for both school districts. TischlerBise completed its work in the summer of 2016 and the resultant draft reports are attached. The draft reports were sent to school district and municipal staffs on August 17, 2016. Impact fees were last updated in 2008 and were adopted at the levels shown in Attachment 4. The recently completed studies disaggregate dwelling types by the number of bedrooms a unit contains and also break out smaller sized (less than 800 square feet) detached units. Additionally, the study includes information on Age Restricted Units, which was a topic of discussion at the May 12, 2015 BOCC work session. Attachment 3 summarizes the maximum supportable impact fees (MSIF) calculated for each school district, shows potential fee levels at various percentages of the MSIF, as well as the percentage change from the current fee levels, if the updated fees were adopted at 60% of the MSIF (as has been the case in the past two update cycles). It should be noted that the Student Generation Rates (SGR) calculated in the current studies are different from the rates adopted for Schools Adequate Public Facilities Ordinance (SAPFO) purposes. This is because the rates adopted for SAPFO purposes are based only on ten years of recently constructed housing while the rates for the impact fee studies must be based on the entire housing stock. There is no proposal to change the SAPFO-adopted SGRs as a result of 2 these studies. In essence, the Educational Facilities Impact Fee Ordinance and SAPFO are distinct and separate ordinances. Since 1995, Orange County has offered an impact fee reimbursement program for school impact fees paid on affordable housing units. From FY2009-10 through FY2015-16, $606,318 in collected impact fees was reimbursed for the 77 affordable single-family housing units and one apartment building containing 6 affordable multi-family units constructed in that time period. Ordinance provisions, including fee levels, pertaining to the educational facilities (aka, "school") impact fee are found in Article 2 of Chapter 30 of the Orange County Code of Ordinances (the Ordinance). Updating the provisions would require that the BOCC hold a public hearing to provide interested parties an opportunity to be heard. After the public hearing, the BOCC can adopt updates to the Ordinance. Proposed Steps in Process The following progression illustrates the potential steps in the process of updating the Code of Ordinances, as it pertains to school impact fees: August 17, 2016 Draft reports sent to School Districts, BOCC, municipal Managers, and municipal Planning Directors. September 6, 2016 Draft reports on BOCC agenda for formal receipt of reports and authorization of next steps. September 21, 2016 Display ad to run in Chapel Hill News and News of Orange to advertise public information meeting. September 21 and Legal ad runs in News of Orange and Durham Herald-Sun advertising 28, 2016 October 4 public hearing. September 26, 2016 Public Information Meeting to be held at the Whitted Meeting Facility. 6:00 p.m. start time. Consultant and Planning staff to present information. September 29, 2016 School Impact Fee Studies scheduled to be a topic for discussion at the Joint BOCC/School Boards meeting. Consultant to be in attendance to address any technical questions. October 4, 2016 Public Hearing on proposed Ordinance amendments. Consultant to finalize studies, incorporating any relevant information received during the meetings held from September 6 through the public hearing. Possible adoption of Ordinance amendments. October 18, 2016 BOCC considers adoption of Ordinance amendments, including updated impact fee levels, if not adopted on October 4. FINANCIAL IMPACT: There is no financial impact in receiving the reports. The consultant's contract for the work/analysis is $71,340. Future residential growth is likely to result in a greater number of students entering the school systems. School impact fees can recover much of the capital costs needed to provide additional school capacities. The level of impact fee to be charged will be determined at a future date. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this agenda item: • GOAL: Establish Sustainable and Equitable Land-Use and Environmental Policies 3 The fair treatment and meaningful involvement of people of all races, cultures, incomes and educational levels with respect to the development and enforcement of environmental laws, regulations, policies, and decisions. Fair treatment means that no group of people should bear a disproportionate share of the negative environmental consequences resulting from industrial, governmental and commercial operations or policies. RECOMMENDATION(S): The Manager recommends that the Board: 1. Receive the draft studies; 2. Hear the presentation by the consultant and Planning staff; 3. Discuss the topic as desired; 4. Direct staff to proceed with the schedule outlined above and Ordinance updates; and 5. Set a public hearing for the October 4, 2016 BOCC meeting. Attachment 1 4 JELHILL HAAPEL e ,ITY SC,1,1 o ;;e,�: SCHOOL IMPACT FEE STUDY DRAFT Prepared for Orange County, North Carolina August 15, 2016 TischlerBise FISCAL. I ECONOMIC I PLANNING 4701 Sangamore Road, Suite S240 Bethesda, MD 20816 800-424-4318 www.tischlerbise.com 5 CHCCS School Impact Fee Report(DRAFT) TABLE OF CONTENTS EXECUTIVE SUMMARY 1 OVERVIEW1 IMPACT FEE METHODOLOGIES 1 MAXIMUM SUPPORTABLE SCHOOL IMPACT FEES 2 Figure 1. Maximum Supportable School Impact Fees:CHCCS 3 GENERAL IMPACT FEE REQUIREMENTS 5 LEGALFRAMEWORK 5 REQUIREDFINDINGS 5 METHODOLOGIES AND CREDITS 6 CHAPEL HILL-CARRBORO CITY SCHOOLS IMPACT FEE OVERVIEW 8 STUDENT GENERATION RATES 9 Figure 2.Student Generation Rates:CHCCS 10 Figure 3.Age-Restricted Unit Generation Rates 10 IMPACT FEES:CHAPEL HILL-CARRBORO CITY SCHOOLS 11 METHODOLOGY11 Figure 4. Impact Fee Methodology Chart:CHCCS 11 BUILDING LEVEL OF SERVICE STANDARDS 12 Figure 5. LOS Standards:CHCCS 12 Figure 6. CHCCS Elementary Schools 12 Figure 7. CHCCS Middle Schools 13 Figure 8. CHCCS High Schools 13 SCHOOL CONSTRUCTION COSTS 14 Figure 9.School Project Costs 14 PORTABLE CLASSROOM COSTS 14 SUPPORT FACILITIES 14 Figure 10.Support Facilities—CHCCS 15 Figure 11.Support Facilities—Serving OCS and CHCCS 15 BUS/VEHICLE COSTS 15 Figure 12. Buses/Vehicles Levels of Service and Costs:CHCCS 15 ADJUSTMENT FOR NON-LOCAL FUNDING 16 CREDIT FOR FUTURE PRINCIPAL PAYMENTS ON SCHOOL IMPROVEMENTS 16 Figure 13. Credit for Future Principal Payments:CHCCS 17 SCHOOL IMPACT FEE INPUT VARIABLES 17 Figure 14.Schools Impact Fee Input Variables:CHCCS 18 ii 6 CHCCS School Impact Fee Report(DRAFT) MAXIMUM SUPPORTABLE IMPACT FEES FOR CHAPEL ILL-CARRBORO CITY SCHOOLS 18 Figure 15. Maximum Supportable Schools Impact Fees:CHCCS 19 CASH FLOW PROJECTIONS 20 Figure 16. Cash Flow Projections:CHCCS 20 IMPLEMENTATION AND ADMINISTRATION 21 ACCOUNTING1 COSTPDATES 1 CREDITS AND EIBURSEENTS 1 COLLECTION AND XPENDITURE ZONES IMPACTFEE ACT APPENDIX A: DEMOGRAPHIC DATA 23 POPULATION AND OUSING ROTH 3 Figure Al. U.S. Census Population and Housing Units 24 Figure A2. 2014 Housing Units 24 Figure A3. Housing Unit Growth 2004-2013:OCS 25 Figure A4. Housing Unit Growth 2004-2013:CHCCS 26 STIATED STUDENT ENERATION ATES Figure A5:ACS PUMS Data Bedroom Count by Category Analysis(Unweighted Sample) 27 Figure A6:OCS Student Counts 27 Figure A7:CHCCS Schools Student Counts 27 Figure A8:OCS Single Family Detached Units—Unknown Bedroom Count Student Allocation 28 Figure A9:CHCCS Single Family Detached Units—Unknown Bedroom Count Student Allocation 29 STUDENT ENERATION ATES Figure A10. OCS Student Generation Rates 30 Figure All. CHCCS Student Generation Rates 31 Figure Al2.Age-Restricted Student Generation Rates 32 PUBLIC SCHOOL STUDENT ENROLLMENT TRENDS AND SAPFO PROJECTIONS 32 Figure A13. Historical Public School Enrollments:OCS 32 Figure A14. Projected Public School Enrollments:OCS 33 Figure A15. Historical Public School Enrollments:CHCCS 34 Figure A16. Projected Public School Enrollments:CHCCS 34 HOUSING UNIT PROJECTIONS 34 Figure A17. Combined Housing Unit Projections 35 APPENDIX B: IMPACT FEE ACT 36 iii 7 CHCCS School Impact Fee Report(DRAFT) APPENDIX C: HOUSING UNIT TYPES 41 ii 8 CHCCS School Impact Fees Report(DRAFT) Executive Summary OVERVIEW TischlerBise was retained by Orange County, North Carolina,to calculate impact fees for public schools to meet the demands generated by new residential development for school facilities in the county. The County has been granted authority by the State to implement impact fees for schools.1 The purpose of the legislation is to "help defray the costs to the county of constructing certain capital improvements,the need for which is created in substantial part by the new development that takes place within the county."' Impact fees are one-time payments used to defray the cost impacts of school facilities necessary to accommodate new development. The payment amount represents new growth's fair share of capital facility needs. TischlerBise evaluated possible methodologies and documented appropriate demand indicators by type of development for the fee amounts. Specific capital costs have been identified using local data and current dollars. Level-of-Service (LOS) standards and cost factors are presented in this report and are the basis for the calculations. It should be noted that although growth affects both capital and operating expenses incurred by schools,the impact fee analysis addresses new development's impact on capital facilities only. It is further limited to capital improvements that provide additional capacity as opposed to maintenance or rehabilitation. Orange County is served by two school systems, Orange County Schools (OCS) and Chapel Hill-Carrboro City Schools(CHCCS).TischlerBise analyzed and calculated school impact fees for each school system.This report details the results of the CHCCS impact fees.The OCS report is issued under separate cover. IMPACT FEE METHODOLOGIES There are three basic methodologies used to calculate impact fees. The incremental expansion method documents the current LOS for each type of public facility in both quantitative and qualitative measures. The intent is to use fee revenue to expand or provide additional facilities,as needed to accommodate new development, based on the current cost to provide capital improvements. The plan-based method is commonly used for public facilities that have adopted plans or engineering studies to guide capital improvements, such as utility systems.A third approach, known as the cost recovery method, is based on the rationale that new development is paying for its share of the useful life and remaining unused capacity of an existing facility or land. 1 S.L.1987-460("An Act Making Sundry Amendments Concerning Local Governments In Orange And Chatham Counties,Title VI: Orange County Impact Fees"). In addition to schools, other community service facility categories are allowed such as: the acquisition of land for open space and greenways,capital improvements to public streets,bridges,sidewalks,bikeways,on-and off-street surface water drainage ditches,pipes,culverts,other drainage facilities,water and sewer facilities and public recreation facilities.(See Appendix B for a copy of the applicable section of the Act.) 2!bid,Sec.17(b)(1). 1 9 CHCCS School Impact Fee Report(DRAFT) Maximum supportable school impact fees for CHCCS are derived using the incremental expansion approach. For school capital improvements, the most common methodology employed is typically the incremental expansion method when future capacity needs are anticipated.This approach allows for the greatest flexibility in providing future capacity improvements. Under this methodology,the fees are based on current LOS standards and project costs for each type of school facility (i.e., elementary, middle, and high), support facilities, portable classrooms, and buses. Land for school sites is not a component of the fee, since the draft 2016 Orange County, NC Schools Adequate Public Facilities Ordinance Annual Report indicates "renovation and expansion to existing facilities may delay construction of new schools further into the future."3 Therefore, new land acquisition is not required at this time. These LOS standards are documented and the intent is to use fee revenue to provide additional or expanded public school and related facilities as needed to accommodate new development. The current LOS and capital costs for new or expanded facilities are used to derive a cost per student for each type of school facility. Using the cost per student and the average CHCCS student generation rate by type of unit, a cost by type of residential unit is derived.The term "student generation rate" refers to the average number of public school students per housing unit in the CHCCS system. Further discussion on student generation rate calculations is provided in the body of this report and in Appendix A. A general requirement common to impact fee calculations is the evaluation of credits.Two types of credits should be considered: future revenue credits and site-specific credits. Revenue credits are necessary to avoid potential double payment situations arising from the payment of a one-time impact fee plus the payment of other revenues that may also fund growth-related capital improvements. Revenue credits are dependent upon the fee methodology used in the cost analysis. To avoid this potential double payment situation, future revenue credits are integrated into the fee to account for outstanding debt on CHCCS school facilities. A credit is necessary since new residential units that will pay the fee will also contribute to future principal payments on this remaining debt through property taxes. A credit is not necessary for interest payments because interest costs are not included in the costs. The second type of credit, a site-specific credit, is for system improvements that have been included in the fee calculations. Policies and procedures related to site-specific credits for system improvements should be addressed in the ordinance that establishes the County's impact fees. However, the general concept is that developers may be eligible for site-specific credits or reimbursements only if they provide system improvements that have been included in the fee calculations. Project improvements normally required as part of the development approval process are not eligible for credits against impact fees. MAXIMUM L E SCHOOL I CT FEES Figure 1 provides the schedule of maximum supportable school impact fees for CHCCS in Orange County, North Carolina. For a single-family detached housing unit, the maximum supportable fee amount is $13,114 for a 0-3 bedroom unit, $25,139 for a 4+ bedroom unit, and $3,848 for a unit with less than 800 3 SAPFOTAC,2016 Orange County,NC Schools Adequate Public Facilities Ordinance(draft),p.Hi. 2 10 CHCCS School Impact Fee Report(DRAFT) square feet; for a single family attached unit, the amount is $10,266 for a 0-2 bedroom unit and $16,414 for a 3+ bedroom unit; for a multifamily unit, the fee is $4,441 for a 0-2 bedroom unit and $18,914 for a 3+ bedroom unit ; and for a manufactured home, the amount fee is $6,999. Additionally, age-restricted units (those units in developments that restrict the number of units with occupants aged under 55 years old) have a maximum fee amount of$756. All fees should be collected when building permits are issued. School impact fees are applied only to residential development and are per housing unit, reflecting the proportionate demand by type of unit.The amounts shown are "maximum supportable" amounts based on the methodologies, LOS, and costs for the capital improvements identified herein. The fees represent the highest amount feasible for each type of applicable development, which represent new growth's fair share of the capital costs as detailed in this report. The County can adopt amounts that are lower than the maximum amounts shown. However, a reduction in fee revenue will necessitate an increase in other revenues, a decrease in planned capital expenditures, and/or a decrease in LOS. Figure 1. Maximum Supportable School Impact Fees: CHCCS MAXIMUM ALLOWABLE SCHOOL IMPACT FEES:Chapel Hill-Carrboro City Schools Impact Fee per Housing Unit Elementary Middle High TOTAL Single Family Detached 0-3 Bedrooms $5,530 $3,541 $4,043 $13,114 4+Bedrooms $9,512 $6,995 $8,632 $25,139 Single Family Detached Average $6,968 $4,809 $5,715 $17,492 Single Family Detached(<800 Sq.Ft.) $1,769 $1,574 $505 $3,848 Single Family Attached 0-2 Bedrooms $5,825 $2,536 $1,905 $10,266 3+Bedrooms $9,291 $3,585 $3,538 $16,414 Single Family Attached Average $8,258 $3,279 $3,071 $14,608 Multifamily 0-2 Bedrooms $2,396 $918 $1,127 $4,441 3+Bedrooms $8,701 $5,159 $5,054 $18,914 Multifamily Average $3,502 $1,661 $1,827 $6,990 Manufactured Unit $3,244 $1,967 $1,788 $6,999 Age-Restricted Unit $756 As another option,the County could choose to adopt fees that consolidate bedroom count subcategories within a broader housing unit category. For instance, Single Family Detached homes,which the proposed fee schedule currently divides into two subcategories(0-3 Bedrooms and 4+ Bedrooms), could be charged a single fee regardless of size. If the County decides to pursue this alternative option, the average impact fee by type of unit provided in this report would be the impact fee amount on the adopted schedule. A note on rounding: Calculations throughout this report are based on an analysis conducted using Excel software. Most results are discussed in the report using one,two, and three digit places, which represent 3 11 CHCCS School Impact Fee Report(DRAFT) rounded figures. However, the analysis itself uses figures carried to their ultimate decimal places; therefore,the sums and products generated in the analysis may not equal the sum or product if the reader replicates the calculation with the factors shown in the report(due to the rounding of figures shown, not in the analysis). 4 12 CHCCS School Impact Fee Report(DRAFT) General Impact Fee Requirements Impact fees are one-time payments used to fund capital improvements necessitated by new growth.This type of fee has been utilized by local governments in various forms for at least 50 years. Impact fees have limitations and should not be regarded as the total solution for infrastructure financing needs. Rather, they should be considered one component of a comprehensive portfolio to ensure adequate provision of public facilities with the goal of maintaining current LOS in a community in the face of new growth. Any community considering impact fees should note the following limitations: • Impact fees can only be used to finance capital infrastructure and cannot be used to finance ongoing operations and/or maintenance and rehabilitation costs; • Impact fees cannot be deposited in the local government's General Fund: the funds must be accounted for separately in individual accounts and earmarked for the capital expenses for which they were collected; and • Impact fees cannot be used to correct existing infrastructure deficiencies unless there is a funding plan in place to correct the deficiency for all current residents and businesses in the community. LEGAL FRAMEWORK U.S. Constitution. Like all land use regulations, development exactions—including impact fees—are subject to the Fifth Amendment prohibition on taking of private property for public use without just compensation. Both state and federal courts have recognized the imposition of impact fees on development as a legitimate form of land use regulation, provided the fees meet standards intended to protect against regulatory takings. To comply with the Fifth Amendment, development regulations must be shown to substantially advance a legitimate governmental interest. In the case of impact fees, that interest is the protection of public health, safety, and welfare by ensuring that development is not detrimental to the quality of essential public services. There is little federal case law specifically dealing with impact fees, although other rulings on other types of exactions (e.g., land dedication requirements) are relevant. In one of the most important exaction cases,the U.S.Supreme Court found that a government agency imposing exactions on development must demonstrate an "essential nexus" between the exaction and the interest being protected (see Nollan v. California Coastal Commission, 1987). In a more recent case (Dolan v. City of Tigard, OR, 1994),the Court ruled that an exaction also must be "roughly proportional" to the burden created by development. However, the Dolan decision appeared to set a higher standard of review for mandatory dedications of land than for monetary exactions such as impact fees. REQUIRED I I There are three reasonable relationship requirements for impact fees that are closely related to "rational nexus" or"reasonable relationship" requirements enunciated by a number of state courts. Although the 5 13 CHCCS School Impact Fee Report(DRAFT) term"dual rational nexus" is often used to characterize the standard by which courts evaluate the validity of impact fees under the U.S. Constitution, we prefer a more rigorous formulation that recognizes three elements: "impact or need," "benefit," and "proportionality." The dual rational nexus test explicitly addresses only the first two, although proportionality is reasonably implied, and was specifically mentioned by the U.S. Supreme Court in the Dolan case. The reasonable relationship language of the statute is considered less strict than the rational nexus standard used by many courts. Individual elements of the nexus standard are discussed further in the following paragraphs. Demonstrating an Impact.All new development in a community creates additional demands on some, or all, public facilities provided by local government. If the supply of facilities is not increased to satisfy that additional demand,the quality or availability of public services for the entire community will deteriorate. Impact fees may be used to recover the cost of development-related facilities, but only to the extent that the need for facilities is a consequence of development that is subject to the fees. The Nollan decision reinforced the principle that development exactions may be used only to mitigate conditions created by the developments upon which they are imposed.That principle clearly applies to impact fees. In this study, the impact of development on improvement needs is analyzed in terms of quantifiable relationships between various types of development and the demand for specific facilities, based on applicable level- of-service standards. Demonstrating a Benefit. A sufficient benefit relationship requires that fee revenues be segregated from other funds and expended only on the facilities for which the fees were charged. Fees must be expended in a timely manner and the facilities funded by the fees must serve the development paying the fees. Procedures for the earmarking and expenditure of fee revenues are typically mandated by the State enabling act, as are procedures to ensure that the fees are expended expeditiously or refunded. All of these requirements are intended to ensure that developments benefit from the fees they are required to pay.Thus, an adequate showing of benefit must address procedural as well as substantive issues. Demonstrating Proportionality. The requirement that exactions be proportional to the impacts of development was clearly stated by the U.S. Supreme Court in the Dolan case (although the relevance of that decision to impact fees has been debated) and is logically necessary to establish a proper nexus. Proportionality is established through the procedures used to identify development-related facility costs, and in the methods used to calculate impact fees for various types of facilities and categories of development. The demand for facilities is measured in terms of relevant and measurable attributes of development. For example, the need for school improvements is measured by the number of public school-age children generated by development. METHODOLOGIES I Any one of several legitimate methods may be used to calculate impact fees. The choice of a particular method depends primarily on the service characteristics and planning requirements for the facility type being addressed. Each method has advantages and disadvantages in a particular situation, and to some 6 14 CHCCS School Impact Fee Report(DRAFT) extent can be interchangeable, because each allocates facility costs in proportion to the needs created by development. Reduced to its simplest terms, the process of calculating impact fees involves two main steps: (1) determining the cost of development-related capital improvements and (2) allocating those costs equitably to various types of development. In practice,though,the calculation of impact fees can become quite complicated because of the many variables involved in defining the relationship between development and the need for facilities. The following paragraphs discuss three basic methods for calculating impact fees and how those methods can be applied. Plan-Based Fee Calculation.The plan-based method allocates costs for a specified set of improvements to a specified amount of development.The improvements are identified by a facility plan and development is identified by a land use plan. In this method, the total cost of relevant facilities is divided by total demand to calculate a cost per unit of demand. Then, the cost per unit of demand is multiplied by the amount of demand per unit of development (e.g. housing units or square feet of building area) in each category to arrive at a cost per specific unit of development (e.g., single family detached unit). Cost Recovery Fee Calculation. The rationale for the cost recovery approach is that new development is paying for its share of the useful life and remaining capacity of facilities already built or land already purchased from which new growth will benefit. This methodology is often used for systems that were oversized, such as sewer and water facilities. To calculate a fee using the cost recovery approach, the facility cost is divided by ultimate number of demand units the facility will serve. Incremental Expansion Fee Calculation. The incremental expansion method documents the current LOS for each type of public facility in both quantitative and qualitative measures, based on an existing service standard (such as square feet per student).The LOS standards are determined in a manner similar to the current replacement cost approach used by property insurance companies. However, in contrast to insurance practices, the fee revenues would not be for renewal and/or replacement of existing facilities. Rather, revenue will be used to expand or provide additional facilities, as needed, to accommodate new development. An incremental expansion cost method is best suited for public facilities that will be expanded in regular increments,with LOS standards based on current conditions in the community. Credits. Regardless of the methodology, a consideration of"credits" is integral to the development of a legally valid impact fee methodology. There are two types of "credits" each with specific, distinct characteristics, but both of which should be addressed in the development of impact fees. The first is a credit due to possible double payment situations. This could occur when contributions are made by the property owner toward the capital costs of the public facility covered by the impact fee.This type of credit is integrated into the impact fee calculation. The second is a credit toward the payment of a fee for dedication of public sites or improvements provided by the developer and for which the impact fee is imposed. This type of credit is addressed in the administration and implementation of an impact fee program. 7 15 CHCCS School Impact Fee Report(DRAFT) Chapel Hill-Carrboro City Schools Impact Fee Overview Orange County has seen significant residential growth over the past several years and with it increased enrollment in both school systems. Growth is expected to continue in the future. Appendix A provides detail on land use and demographic assumptions and projections. To ensure that CHCCS have adequate capacity to accommodate growth, Orange County is considering implementation of updated impact fees for schools. The County has been granted authority by the State to implement impact fees for Schools.4 The purpose of the legislation is to "help defray the costs to the county of constructing certain capital improvements,the need for which is created in substantial part by the new development that takes place within the county."5 Orange County is served by two school systems, OCS and CHCCS. TischlerBise analyzed and calculated school impact fees for each school system. This report details the results of the CHCCS impact fees. The report for OCS is issued under separate cover. The reports comply with relevant requirements for calculation of impact fees. CHCCS impact fees are derived using the incremental approach. This approach determines current LOS standards for school buildings (elementary, middle,and high), portable classrooms, support facilities, and buses. Land for school sites is not a component of the fee,since the draft 2016 Orange County, NC Schools Adequate Public Facilities Ordinance Annual Report indicates "renovation and expansion to existing facilities may delay construction of new schools further into the future."6 Therefore, new land acquisition is not required at this time. LOS standards are derived using the adopted standards per the County's Schools Adequate Public Facility Ordinance (SAPFO) and are expressed as follows: • School buildings: Square feet per student by type of school, • Portable classrooms: Classrooms per student by type of school; • Support facilities: Square feet per student; and • Buses/other vehicles: Number of vehicles per student. A credit is included in the impact fee to account for outstanding debt on CHCCS improvements. Further detail on the approach, LOS, costs, and credits is provided in the body of this report. 4 S.L.1987-460("An Act Making Sundry Amendments Concerning Local Governments In Orange And Chatham Counties,Title VI: Orange County Impact Fees"). In addition to schools, other community service facility categories are allowed such as: the acquisition of land for open space and greenways,capital improvements to public streets,bridges,sidewalks,bikeways,on-and off-street surface water drainage ditches,pipes,culverts,other drainage facilities,water and sewer facilities and public recreation facilities.(See Appendix B for a copy of the applicable section of the Act.) 5!bid,Sec.17(b)(1). 6 SAPFOTAC,2016 Orange County,NC Schools Adequate Public Facilities Ordinance(draft),p. 8 16 CHCCS School Impact Fee Report(DRAFT) Student Generation Rates Demand for additional school capacity will come from new residential development. To determine the level of this demand, student generation rates are used.The term "student generation rate" refers to the number of public school students per housing unit in the CHCCS system.' Public school students are a subset of school-aged children, which includes students in private schools and home-schooled children. Student generation rates are important demographic factors that help account for variations in demand for school facilities by type of housing. Students per housing unit are held constant over the projection period since the impact fees represent a "snapshot approach" of current LOS and costs. TischlerBise obtained student generation data for each school system in the county from Orange County. The student generation rates were calculated using 2013-2014 student address data geocoded to Orange County land records tracking housing unit types. These data were analyzed for units built during two different time periods: prior to 2004, and from 2004 through 2013. Data were collated for these two discrete periods in order to evaluate whether new development patterns and demand trends in the residential market had impacted student generation rates for recently built units. Student generation rates for units constructed from 2004 to 2013 were drawn from an earlier TischlerBise study, finished in May 2015. In some cases,these data from these two periods are combined due to availability limitations, as detailed in Appendix A. Rates are provided for each of the five housing unit types used in the impact fee analysis for each level of school facility: (1) Elementary; (2) Middle; and (3) High. For single family detached homes, separate rates are included for 0-3 bedroom and 4+ bedroom units. For single family attached and multifamily units, separate rates are provided for 0-2 bedroom and 3+ bedroom units. Rates for single family detached (less than 800 square feet) units and manufactured homes are not segmented by bedroom count given the smaller square footage of these types of units. Student generation rates for CHCCS are shown below in Figure 2. 'Student generation rates are calculated separately for each school system in the County.(See Appendix A for more detail.) 9 17 CHCCS School Impact Fee Report(DRAFT) Figure 2. Student Generation Rates: CHCCS School Level Type of Unit Elementary(K-5) Middle(6-8) High(9-12) Total Single Family Detached 0-3 Bedrooms 0.150 0.081 0.104 0.336 4+Bedrooms 0.258 0.160 0.222 0.640 Total 0.189 0.110 0.147 0.446 Single Family Detached(<800 Sq.Ft.) 0.048 0.036 0.013 0.096 Single Family Attached 0-2 Bedrooms 0.158 0.058 0.049 0.265 3+Bedrooms 0.252 0.082 0.091 0.425 Total 0.224 0.075 0.079 0.378 Multifamily 0-2 Bedrooms 0.065 0.021 0.029 0.115 3+Bedrooms 0.236 0.118 0.130 0.485 Total 0.095 0.038 0.047 0.180 Manufactured 0.088 0.045 0.046 0.179 As shown above, a 0-3 bedroom single family detached unit is estimated to generate a total of 0.336 students (with 0.150 in elementary grades, 0.081 in middle school grades, and 0.104 in high school grades), a 4+bedroom single family detached unit is estimated to generate a total of 0.640 students, and a single family detached unit with less than 800 square feet generates a total of 0.096. For single family attached, a 0-2 bedroom unit is estimated to generate a total of 0.265 students and a 3+ bedroom unit is estimated to generate a total of 0.425; for multifamily units, a 0-2 bedroom unit is estimated to generate a total of 0.115 students and 3+ bedroom unit is estimated to generate 0.485; and a manufactured home is estimated to generate a total of 0.179 students per unit. Additionally, TischlerBise calculated a generation rate for age-restricted units (those units in developments that restrict the number of units with occupants aged under 55 years old) based on data provided by Epcon Communities.This type of community is relatively new to the development landscape in the Raleigh-Durham-Chapel Hill region. Figure 3 shows available data,which yields a student generation rate of 0.019. As these developments reach maturity and other age-restricted communities come to market, TischlerBise recommends updating the student generation rate calculation for age-restricted units. Figure 3. Age-Restricted Unit Generation Rates Development Location Homes Head of Household<55 y.o. School Age Children Courtyards at Culp Arbor Durham,NC 69 2 0 Courtyards at Cary Cary,NC 15 0 0 Courtyards at Okelly-Chapel Cary,NC 22 2 0 Villas at Maple Creek Westerville,OH 52 2 3 158 6 3 Student Generation Rate 0.019 Source:Epcon Communities 10 18 CHCCS School Impact Fee Report(DRAFT) Impact Fees: Chapel Hill-Carrboro City Schools METHODOLOGY The CHCCS impact fee methodology is based on current average public school student generation rates, LOS standards, and local costs. Figure 4 illustrates the methodology used to calculate the fee.The school impact fees use an incremental expansion approach,which documents the current LOS for public facilities in both quantitative and qualitative measures. The intent is to use impact fee revenue to expand or provide additional facilities, as needed to accommodate new development, based on the current LOS and cost to provide capital improvements.All school levels are included in the fees. Costs for school buildings, portable classrooms, support facilities, and buses/vehicles are included in the fee.The costs are adjusted to account for estimated State funding for capacity projects;therefore,the fees reflect the County's share of the total costs. Finally, a credit for future principal payments on existing debt is included. Figure 4. Impact Fee Methodology Chart: CHCCS li ppIifµ lllll ®III � 1111111 I hill)Illlll1111 I'Y' 011011 II lllIli° 111111 illimIng Ii lulivaiu uu III ipa 1°1110111111111111 mg du non 110 m @A Ano0 111111111ulll01101l10000010li101110 1pz ,I II I 11 11 111 111 Ram inagliffin '1 11111 1 II I 101110I0111 w 0II V1 I� I� ii0'0 uilii 1111i�11i` l 11111011 111 0 1V1 H11101101 111 IOOIAIOOOOOOOOOOOOOIO 0004 11110100000000000000000 III ul a it oo uuiiii I it ii 19 CHCCS School Impact Fee Report(DRAFT) BUILDING LEVEL OF SERVICE This section provides current inventories of elementary, middle, and high schools in the CHCCS system. The data contained in these tables are used to determine infrastructure standards for school buildings on which the impact fees are based. The draft 2016 Orange County, NC Schools Adequate Public Facility Ordinance Annual Report provides current adopted LOS by school type that are used for the impact fee study. LOS means the amount of students that can be accommodated at a certain school system level. Figure 5 provides the adopted LOS standards. Figure 5. LOS Standards: CHCCS LEVEL OF SERVICE STANDARDS I CHCCS Elementary(K-5) 105% Middle(6-8) 107% High(9-12) 110% Source:Orange County,NC,Schools Adequate Public Facilities Ordinance Annual Report 2016(Draft) W W e ry Sch. S The inventory and current LOS for CHCCS elementary schools are shown below in Figure 6. Elementary school buildings have a total of 860,440 square feet of floor area and 27 portable classrooms. Total enrollment in all elementary schools is 5,501. LOS factors for CHCCS elementary schools are also shown in Figure 6.The adopted LOS standards(based on 105 percent capacity)for school buildings and portables are shaded in the figure below. As shown,the LOS factors on which the impact fees are based are 140.58 square feet and 0.0044 portable classrooms per student. It should be noted that the capacity figures reflect mandated reduced class size for Grades K-3 from 1:23 to 1:21, reflecting actual current LOS and the standards by which new schools will be planned and built. Figure 6. CHCCS Elementary Schools ELEMENTARY SCHOOLS(K-5) Official Inventory,Enrollment and Utilization Building Portable SY 1546 Level of Facility Square Feet Classrooms Enrollment(1] Capacity(21 Service Carrboro Elementary 61,562 1 502 533 94% Ephesus Elementary 73,096 7 440 448 98% Estes Hills Elementary[3] 57,989 2 485 527 92% Glenwood Elementary 55,372 2 531 538 99% F.P.Graham Elementary 68,513 5 454 423 107% McDougle Elementary 99,920 2 499 564 88% Morris Grove Elementary 90,221 0 558 585 95% Northside Elementary 97,423 0 485 585 83% Rashkis Elementary 95,729 0 517 585 88% Scroggs Elementary 92,900 2 505 575 88% Seawell Elementary 67,715 6 525 466 113% TOTALS 860,440 27 5,501 5,829 94% Elementary School Levels of Service Demand Units(Students) Building SF Portables LOS per Student based on Current Enrollment 5,501 156.42 0.0049 LOS per Student based on Capacity 5,829 147.61 0.0046 LOS based on Adopted LOS Standard(105%) 6,120 140.58 0,0044 [1]Does not include CHCCS students attending the Hospital School or pre-K students. [2]Capacity reflects class size for Grades K-3 of 1:21;Grades 4-5 of 1:26.Max capacity per school by policy resolution is 585 students. Source:Orange County;CHCCS 12 20 CHCCS School Impact Fee Report(DRAFT) C Sch. The inventory and current LOS for CHCCS middle schools are shown below in Figure 7.As indicated below, middle school buildings have a total of 506,160 square feet of floor area and two portable classrooms. Total enrollment in all middle schools is 2,844. LOS factors for CHCCS middle schools are shown in Figure 7. The adopted LOS standards (based on 107 percent capacity) for school buildings and portables are shown highlighted in the figure below. As shown,the LOS factors on which the impact fees are based are 160.68 square feet and 0.0006 portable classrooms per student. Figure 7. CHCCS Middle Schools MIDDLE SCHOOLS(6-8) Official Inventory,Enrollment and Utilization Building Portable SY 15-16 Level of Facility Square Feet Classrooms Enrollment(1] Capacity Service Culbreth Middle 122,467 0 716 774 93% McDougle Middle 138,141 2 689 732 94% Phillips Middle 109,498 0 642 706 91% Smith Middle 136,054 0 797 732 109% TOTAS1 506,160 2 2,844 Z944 97% Middle School Levels of Service Demand Units(Students) Building SF Portables LOS per Student based on Current Enrollment 2,844 177.97 0.0007 LOS per Student based on Capacity 2,944 171.93 0.0290 LOS based on Adopted LOS Standard(107%) I 3,150 I 160,68 I 4.0006 [1]Does not include CHCCS students attending the Hospital School. Source:Orange County;CHCCS CHCCC ) h Sch—�] The inventory and current LOS for CHCCS high schools are shown below in Figure 8. As indicated below, high school buildings have a total of 693,283 square feet of floor area and 22 portable classrooms. Total enrollment in all high schools is 3,701. LOS factors for CHCCS high schools are shown in Figure 8. The adopted LOS standards (based on 110 percent capacity) for school buildings and portables are shown highlighted in the figure below. As shown,the LOS factors on which the impact fees are based are 162.65 square feet and 0.0052 portable classrooms per student. Figure 8. CHCCS High Schools HIGH SCHOOLS(9-12) Official Inventory,Enrollment and Utilization Building Portable SY 15-16 Level of Facility Square Feet Classrooms Enrollment 11J Capacity Service Carrboro High 165,976 0 824 800 103% Chapel Hill High 254,551 14 1,471 1,520 97% East Chapel Hill High 267,549 8 1,373 1,515 91% Phoenix Academy High[2] 5,207 0 33 40 83% TOTALS1 693,283 22 3,701 3,875 96% High School Levels of Service Demand Units(Students) Building SF Portables LOS per Student based on Current Enrollment 3,701 187.32 0.0059 LOS per Student based on Capacity 3,875 178.91 0.0057 LOS based on Adopted LOS Standard(110%) I 4,263 I 162.65 I 0.0052 [1]Does not include CHCCS students attending the Hospital School. [2]Co-located with Lincoln Center administration and support building Source:Orange County;CHCCS 13 21 CHCCS School Impact Fee Report(DRAFT) SCHOOL CONSTRUCTION TischlerBise analyzed costs for school construction in the CHCCS system.Costs for completed and planned school projects in CHCCS were provided by the Orange County Finance Office and CHCCS. TischlerBise adjusted previous costs to current(2016 01) dollars, where appropriate, using the Turner Building Index, a well-known and widely available construction price index. Current school costs represent the average costs to construct elementary, middle, and high schools in the CHCCS System. As shown in Figure 9, construction costs average between$252 and$288 per square foot.Specifically,the costs are as follows— elementary: $277 per square foot; middle: $287 per square foot; and high: $252 per square foot. Figure 9. School Project Costs School Year Cost Index Factor Adjusted Cost[1] Square Feet Cost per SF Capacity Cost per Seat Morris Grove Elementary 2008 $24,342,000 107% $26,004,119 90,221 $288 585 $44,451 Northside Elementary 2013 $23,158,000 112% $25,999,144 97,423 $267 585 $44,443 Elem.Subtotal $52,003,262 187,644 $277 1,170 $44,447 Middle School Prototype(per seat)[2] - $46,179 - $46,179 160.68 $287 1 $46,179 Carrboro High[3] 2007,2011 $36,778,860 114% $41,774,583 165,976 $252 800 $52,218 $84,325,039 $93,824,025 353,781 $265 1,971 $47,602 [1]Adjusted using the Turner Building Cost Index,2016 First Quarter Forecast. [2]Derived as a percentage of the OCS cost per sq.ft.for middle schools.TischlerBise defined a)the relationship between CHCCS and OCS of the average cost per sq.ft.for all recent school projects and b)the relationship between OCS's middle school and its elementary and high schools.These two percentages are then multiplied by OCS's cost per sq.ft.for middle schools to derive the average CHCCS cost. [3]Includes Cultural Arts addition in 2011.Cost indexed using 2007 figures. PORTABLE CLASSROOM COSTS CHCCS currently uses portable classrooms for additional classroom capacity with a total of 73 classrooms currently in use.The cost for each portable classroom is$78,000, per Orange County staff. SUPPORT FACILITIES The impact fees also include costs to provide additional support facilities such as administrative office space, maintenance facilities, and bus garages to accommodate future growth in enrollment. For CHCCS, support facilities include office space and gymnasium at Lincoln Center, a maintenance building, and the Transportation Center.The joint use Transportation Facility serves both school systems in the county and, therefore, costs are allocated to current enrollment in both districts (see Appendix A). Costs were confirmed with CHCCS staff. The following two figures reflect current LOS and cost factors for these facilities. 14 22 CHCCS School Impact Fee Report(DRAFT) Figure 10. Support Facilities—CHCCS Square Facility Feet Transportation Center 5,089 Lincoln Center,Main Building 27,726 Gymnasium 10,162 Maintenance Building 26,957 Total) 69,934 Current Total CHCCS Enrollment 12,046 LOS(sq.ft.per student) 5.81 Cost per Square Foot $225 Cost per Student $1,306.26 Source:CHCCS;TischlerBise Figure 11. Support Facilities—Serving OCS and CHCCS Square Cost Total Facility Feet Per Sq Ft Cost Transportation Facility* 11,704 $200 $2,340,800 Total) 11,704 $200 $2,340,800 Current Total CHCCS and OCS Enrollment 19,572 LOS(sq.ft.per student) 0.5980 Cost per Student $119.60 BUS*Serves both OCS and CHCCS Districts Source:Orange County Schools /VEHICLE Another infrastructure component included in the impact fee is buses and vehicles. New buses and vehicles will need to be purchased to accommodate increased enrollment. In Orange County, OCS owns and maintains all regular buses(i.e., non-activity buses). Nevertheless, new development in CHCCS District must pay its fair share of costs for bus service, so bus costs are included as a component in this fee,to be remitted to OCS.Total current value of the CHCCS fleet is estimated at approximately$9.6 million,which equates to a current cost of approximately $797 per student. LOS and costs for the CHCCS fleet are provided below in Figure 12. Figure 12. Buses/Vehicles Levels of Service and Costs: CHCCS Type Number of Units Cost/Bus Total Cost CHCCS Buses 82 $83,690 $6,862,580 CHCCS Activity Buses 20 $84,144 $1,682,880 Other Vehicles 35 $30,000 $1,050,000 Total) 137 $70,040 $9,595,460 Source:CHCCS Current Total CHCCS Enrollment 12,046 Buses/Vehicles per Student 0.011 Cost per Student $796.57 15 23 CHCCS School Impact Fee Report(DRAFT) ADJUSTMENT FOR NON-LOCAL FUNDING To adequately reflect the local share of capacity costs,the impact fees need to be adjusted to account for State funding for capacity improvements. Orange County estimates that the County receives one percent of the costs for capacity improvements from the State.Therefore,the local share is adjusted to represent 99 percent of the total. (Other contributions from the State are used for maintenance and other non- capacity related improvements.) CREDIT FOR FUTURE PRINCIPAL PAYMENTS ON SCHOOL I Because the County debt-financed a portion of recent school capacity expansion construction costs, a credit is included for future principal payments on outstanding debt. A credit is necessary since new residential units that will pay the impact fee will also contribute to future principal payments on this remaining debt through property taxes. A credit is not necessary for interest payments because interest costs are not included in the costs. Information on outstanding debt for CHCCS was provided by Orange County Finance Department staff. School improvements and applicable bond issues are indicated in Figure 13 below. As shown, total outstanding debt from school capacity expansion projects for CHCCS is estimated at approximately$65.3 million.Annual principal payments are divided by student enrollment in each year(projected beyond 2018 using an historical growth rate of 1% annually) to get a per student credit. (For example, in FY 2018, the total amount of projected principal to be paid of $7.3 million is divided by enrollment of 12,724 for a payment per student of$575.)To account for the time value of money, annual payments per student are discounted using a net present value formula based on an average current interest rate of 3.15 percent. The total net present value of future principal payments per student is $4,246.69. This amount is subtracted from the gross capital cost per student amount to derive a net capital cost per student for school facilities. 16 24 CHCCS School Impact Fee Report(DRAFT) Figure 13. Credit for Future Principal Payments: CHCCS 2010 Projected 2011 Projected 2012 Projected 2011 Projected 2012 Projected 2014 Projected 2015 Projected 2015 Projected Total Payment Fiscal Vear Total Per !il (4 (31 fal fs/ fsl Pl !al Principal Principal Principal Principal Principal Principal Principal Principal Students Student 2016 $710,978 $114502 $417,217 $1,194,926 $1,210,698 $566,268 $600,000 $2,649,127 $7,463,715 12,388 $602 2017 $703,796 $112,331 $408,831 $2,476,707 $1,216,320 $566,268 $600,000 $2562,485 $8,646,739 12,554 $689 2018 $709,182 $230,631 $0 $1,183,924 $1,641,751 $566,268 $600,000 $2,386577 $7,318,334 12,724 $575 2019 $1,102,375 $335,365 $647,840 $1,237,038 $1,724,213 $566,268 $600,000 $351,817 $6564,915 12,876 $510 2020 $1,098,784 $332,652 $1,012,643 $1,242,302 $1,729,836 $209,677 $600,000 $0 $6,225,894 13,013 $478 2021 $1,093,398 $600,184 $0 $1,250,198 $1,727,962 $209,677 $600,000 $0 $5,481,418 13,162 $416 2022 $626,624 $730,965 $0 $1,258,094 $1,731,710 $209,212 $600,000 $0 $5,156,605 13,316 $387 2023 $0 $148,689 $1,629,035 $1,268,622 $1,739,207 $209,212 $0 $0 $4,994,765 13,452 $371 2024 $0 $0 $1,073,444 $1,276,518 $1,235,062 $209,212 $0 $0 $3,794,235 13,602 $279 2025 $0 $0 $0 $1,287,046 $1,152599 $209,212 $0 $0 $2,648,857 13,738 $193 2026 $0 $0 $0 $2,736,334 $423,557 $208,747 $0 $0 $3,368,638 13,875 $243 2027 $0 $0 $0 $0 $423,557 $208,747 $0 $0 $632,304 14,014 $45 2028 $0 $0 $0 $0 $423,557 $208,747 $0 $0 $632,304 14,154 $45 2029 $0 $0 $0 $0 $423,557 $208,747 $0 $0 $632,304 14,296 $44 2030 $0 $0 $0 $0 $423,557 $0 $0 $0 $423,557 14,439 $29 2031 $0 $0 $0 $0 $423,557 $0 $0 $0 $423557 14,583 $29 2032 $0 $0 $0 $0 $423,557 $0 $0 $0 $423,557 14,729 $29 2033 $0 $0 $0 $0 $423,557 $0 $0 $0 $423557 14,876 $28 Total $6,045,137 $2,605,319 $5,189,011 $16,411,706 $18,497,811 $4,356,263 $4,200,000 $7,950,006 $65,255,253 $4,994 Discount Rate[6] 3.15% Net Present Value$4,246.69 (1)Smith MS,Rashkis Elem.,(issued in March 2010)-Refunding 2010 (2)Rashkis Elem.(issued in November 2011)-Refunding 2011 (3)Carrboro High(issued in December 2012)-Refunding 2012 (4)Morris Grove Elem,CHCCS Renovations(issued September 2011)-Installment#1) (5)Northside Elem(issued April 2012)-Installment#2) (6)Culbreth MS Science Wing(issued January 2014)-Installment#3) (7)Carrboro High(issued June 2015)-Refunding of 2006 COPS (8)Smith MS,East CH High(issued June 2015)-Refunding Series 2015 (9)See Appendix for enrollment projections.Starting in 2018,enrollment is projected based on historical average growth rate of 1%. (10)To account for the time value money,total payment per student is discounted using a net present value formula assuming the average interest rate from outstanding debt as shown. L I CT FEE INPUT VARIABLES Factors used to derive the CHCCS impact fee are summarized in Figure 14. Impact fees for schools are based on student generation rates (i.e., public school students per housing unit) and are only implemented on residential development. LOS standards are based on current costs per student for school buildings, portable classrooms, support facilities, and buses/vehicles as described in the previous sections and summarized below. Also included in the fee is the cost for preparation of the impact fee study. The consultant study cost per student is calculated based on the projected increase in student enrollment (based on SAPFO projections; see Appendix A) in CHCCS and OCS over the next three years and is added to the capital cost per student to derive the total cost per student.Three years reflects the typical length of time before the impact fees should be reexamined to reflect changes in development and levels of service. The total gross capital cost per student is the sum of the boxed cost components. For example, for the elementary school portion, the calculation is as follows: $38,961.27 [building construction] + $344.09 [portables]+$1,295.67[support facilities]+$796.57[buses]+$134.92[consultant cost]=$41,532.52 total gross cost per student. This cost is then adjusted to reflect the local share of the cost at 99 percent,or$41,117.19 per elementary student, for instance. The credit for future principal payments ($4,246.69) is then subtracted from the gross local capital cost per student to derive the net local capital cost per student ($36,870.50) for elementary schools.The same approach is followed for middle and high schools. 17 25 CHCCS School Impact Fee Report(DRAFT) Figure 14. Schools Impact Fee Input Variables: CHCCS Current Level of Service Standards Elementary Middle High Square Feet per Student 140.58 160.68 162.65 Cost per Sq.Ft. $277 $287 $252 Total Building Construction Cost per Student $38,961.27 $46,178.91 $40,936.72 Portable Classrooms per Student 0.0044 0.0006 0.0052 Cost per Portable Classroom $78,000 $78,000 $78,000 Portable Classroom Cost per Student $344.09 $49.52 $402.58 CHCCS Support Facilities per Student(Sq.Ft.) 5.81 5.81 5.81 Cost per Sq.Ft. $200 $200 $200 OCS/CHCCS Transp.Facility per Student(Sq.Ft.) 0.60 0.60 0.60 Cost per Sq.Ft. $225 $225 $225 Support Facility Cost per Student $1,295.67 $1,295.67 $1,295.67 Buses/Vehicles per Student 0.01137 0.01137 0.01137 Weighted Average Cost per Bus/Vehicle $70,040 $70,040 $70,040 Bus/Vehicle Cost per Student $796.57 $796.57 $796.57 Consultant Study Cost per Student $134.92 $134.92 $134.92 Total Gross Cost Per Student $41,532.52 $48,455.58 $43,566.45 Local Share of Capacity Cost 99% 99% 99% Total Gross Local Capital Cost per Student $41,117.19 $47,971.03 $43,130.78 Principal Payment Credit per Student ($4,246.69) ($4,246.69) ($4,246.69) Total Net Local Capital Cost per Student $36,870.50 $43,724.33 $38,884.09 Average Capital Cost per Student(all levels) $39,826.31 MAXIMUM L IMPACT FEES FOR CHAPEL HILL-CARRBORO CITY SCHOOLS Figure 15 shows the schedule of maximum supportable impact fees for CHCCS.The fees are calculated by multiplying the student generation rate for each housing type (shown at the top of Figure 15) by the net capital cost per student for each type of school. Each component is then added together to derive the total public school impact fee. For example,for a 0-3 bedroom single family detached unit,the elementary school portion of the fee is calculated by multiplying the student generation rate of 0.150 by the net local capital cost per elementary student of $36,870.50, which results in a fee of $5,530 (truncated). This is repeated for the other school levels. The three portions of the fee are added together to calculate the total fee by type of residential unit(i.e.,for 0-3 bedroom single family detached: $5,530+$3,541+$4,043 = $13,114.)8 For age-restricted units, the student generation rate of 0.019 is multiplied by the average total net local capital cost per student for all school levels($39,826.31),since the school level of generated pupils was not available in the Epcon Communities data.This results in a fee of$756 per unit. 8 Because the analysis uses figures carried to their ultimate decimal places,the sums and products shown may not equal the sum or product if the reader replicates the calculation with the factors shown in the report. 18 26 CHCCS School Impact Fee Report(DRAFT) Figure 15. Maximum Supportable Schools Impact Fees: CHCCS School Level Public School Students per Housing Unit Elementary Middle High Total Single Family Detached 0-3 Bedrooms 0.150 0.081 0.104 0.336 4+Bedrooms 0.258 0.160 0.222 0.640 Average 0.189 0.11 0.147 0.446 Single Family Detached(<800 Sq.Ft.) 0.048 0.036 0.013 0.096 Single Family Attached 0-2 Bedrooms 0.158 0.058 0.049 0.265 3+Bedrooms 0.252 0.082 0.091 0.425 Average 0.224 0.075 0.079 0.378 Multifamily 0-2 Bedrooms 0.065 0.021 0.029 0.115 3+Bedrooms 0.236 0.118 0.130 0.485 Average 0.095 0.038 0.047 0.180 Manufactured Unit 0.088 0.045 0.046 0.179 Age-Restricted Unit 0.019 Cost Factors Total Net Local Capital Cost per Student $36,870.50 $43,724.33 $38,884.09 Average Capital Cost per Student(all levels) $39,826.31 MAXIMUM ALLOWABLE SCHOOL IMPACT FEES:Chapel Hill-Carrboro City Schools Impact Fee per Housing Unit Elementary Middle High TOTAL Single Family Detached 0-3 Bedrooms $5,530 $3,541 $4,043 $13,114 4+Bedrooms $9,512 $6,995 $8,632 $25,139 Single Family Detached Average $6,968 $4,809 $5,715 $17,492 Single Family Detached(<800 Sq.Ft.) $1,769 $1,574 $505 $3,848 Single Family Attached 0-2 Bedrooms $5,825 $2,536 $1,905 $10,266 3+Bedrooms $9,291 $3,585 $3,538 $16,414 Single Family Attached Average $8,258 $3,279 $3,071 $14,608 Multifamily 0-2 Bedrooms $2,396 $918 $1,127 $4,441 3+Bedrooms $8,701 $5,159 $5,054 $18,914 Multifamily Average $3,502 $1,661 $1,827 $6,990 Manufactured Unit $3,244 $1,967 $1,788 $6,999 Age-Restricted Unit $756 19 27 CHCCS School Impact Fee Report(DRAFT) Cash Flow Projections This section summarizes the potential cash flow to Orange County if impact fees are implemented for CHCCS at the maximum supportable amounts as detailed in this report. Figure 16 provides a summary of the projected cash flow from the impact fees and associated capital costs over a five-year period. School impact fee revenue averages approximately $3.49 million per year over the first five years, or almost$17.45 million, if the fees are implemented at the maximum supportable level.The related school local capital costs average approximately$4.65 million per year, or$23.28 million over five years. Based on the projected impact fee revenues and associated costs,the fees are projected to cover approximately 75 percent of the projected related capital costs. Funds can be accumulated for several years in order to construct a major project. Since the school impact fee includes a credit for existing debt, an overall deficit for schools is projected. The projected deficit, indicated by "( )" around the numbers, will require supplemental revenue of approximately$1.16 million per year. To the extent the rate of development either accelerates or slows down, there will be a corresponding change in the fee revenue and related capital costs. See Appendix A of this report for discussion of the development projections that drive the cash flow analysis. Figure 16. Cash Flow Projections: CHCCS 5-Year 5-Year 10-Year 1 2 3 4 5 Average Cumulative Average Cumulative 2016 2017 2018 2019 2020 Annual Total Annual Total PROJECTED REVENUES SCHOOLS 1 Single Family Detached $1,193 $1,193 $1,193 $1,193 $1,193 $1,193 $5,965 $1,193 $11,930 2 Single Family Attached $747 $747 $747 $747 $747 $747 $3,736 $747 $7,472 3 Multifamily $1,549 $1549 $1549 $1549 $1549 $1549 $7,747 $1549 $15,493 4 Manufactured $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Schools Fees $3,489 $3,489 $3,489 $3,489 $3,489 $3,489 $17,447 $3,489 $34,895 TOTAL FEE REVENUE $3,489 $3,489 $3,489 $3,489 $3,489 $3,489 $17,447 $3,489 $34,895 CAPITAL i PROJECTED �i� r�;�����alShare) SCHOOLS Schools-Elementary $1,867 $1,867 $1,867 $1,867 $1,867 $1,867 $9,336 $1,867 $18,671 Schools-Middle $1,247 $1,247 $1,247 $1,247 $1,247 $1,247 $6,236 $1,247 $12,473 Schools-High $1,541 $1541 $1541 $1541 $1541 $1541 $7,707 $1541 $15,413 Subtotal Schools Costs $4,656 $4,656 $4,656 $4,656 $4,656 $4,656 $23,279 $4,656 $46,557 TOTAL CAPITAL COSTS $4,656 $4,656 $4,656 $4,656 $4,656 $4,656 $23,279 $4,656 $46,557 NET CAPITAL FACILITIES CASH FLOW-Schools Current$in thousands Annual Surplus(or Deficit) ($1,166) ($1,166) (,1 166) ($1,166) ($1,166) ($1,166) ($1,166) Cumulative Surplus(or Deficit) ($1,166) ($2,332) ($3,499) ($4,665) ($5,831) ($15,831) (;;11,662) 20 28 CHCCS School Impact Fee Report(DRAFT) Implementation and Administration ACCOUNTING Impact fees should be paid at time of building permit. Certain accounting procedures should be followed by the County. For example, monies received should be placed in a separate fund and accounted for separately and may only be used for the purposes authorized in the impact fee ordinance. Interest earned on monies in the separate fund should be credited to the fund. COST UPDATES All costs in the impact fee calculations are given in current dollars with no assumed inflation over time. Necessary cost adjustments can be made as part of the recommended annual evaluation and update of the fees. One approach is to adjust for inflation in construction costs by means of an index specific to construction as opposed to the consumer price index (CPI), which is more general in nature.TischlerBise recommends using the Marshall Swift Valuation Service, which provides comparative cost multipliers for various geographies and types of construction. The multipliers can be applied against the calculated impact fee. If cost estimates or other factors change significantly the County should redo the fee calculations. A full update is recommended every 3 to 5 years to reflect changes in development trends, infrastructure capacities, costs, funding formulas, etc. CREDITS I S„ re eve re ifs CHCCS impact fees are calculated using an incremental approach.This method documents current factors and is best suited for public facilities that will be expanded incrementally in the future. Because new development will provide front-end funding of infrastructure, there is a potential for double payment of capital costs due to future principal payments on existing debt for public facilities. A credit is not necessary for interest payments because interest costs are not included in the fees. This type of credit is incorporated into the CHCCS impact fees due to outstanding debt on CHCCS school capacity expansions and land acquisition. Site-Specific Cre iis A site-specific credit should be considered for contributions of system improvements that have been included in the impact fee calculations. If a developer constructs the type of system improvements included in the fee calculations, it will be necessary to either reimburse the developer or provide a credit against the fees for that portion of the fee. The latter option is more difficult to administer because it creates unique fees for specific geographic areas. Based on TischlerBise's experience, it is better for the County to establish a reimbursement agreement with the developer constructing the system improvement.The reimbursement agreement should be limited to a payback period of no more than 10 21 29 CHCCS School Impact Fee Report(DRAFT) years and the County should not pay interest on the outstanding balance. The developer must provide sufficient documentation of the actual cost incurred for the system improvement.The County should only agree to pay the lesser of the actual construction cost or the estimated cost used in the impact fee analysis. If the County pays more than the cost used in the fee analysis, there will be insufficient fee revenue. Reimbursement agreements should only obligate the County to reimburse developers annually according to actual fee collections from the benefiting area. COLLECTION I The reasonableness of impact fees is determined in part by their relationship to the local government's burden to provide necessary public facilities. The need to show a substantial benefit usually requires communities to evaluate collection and expenditure zones for public facilities that have distinct geographic service areas. TischlerBise analyzed school impact fees in the County separately for each school system that serves residential development in Orange County—OCS and CHCCS. The end result is two separate fee studies with two impact fee schedules. For the CHCCS system, one area within the school district is appropriate because capacity improvements are needed at all levels throughout the system and CHCCS will occasionally re-district to accommodate growth and available capacity. IMPACT FEE ACT The Act providing Orange County with the authority to collect school impact fees is provided in Appendix B. 22 30 CHCCS School Impact Fee Report(DRAFT) Appendix A: Demographic Data OVERVIEW As part of our Work Scope, TischlerBise has prepared documentation on demographic data and development projections used in the Schools Impact Fee Studies. Two studies have been conducted for Orange County: (1)OCS and (2)CHCCS.This Appendix covers both school systems in the County,while the body of the report reflects CHCCS only. (The OCS report is issued under separate cover.)The demographic data estimates for the school year 2006-2007 are used in the fee calculations. Impact fees can be defined as new growth's fair share of the cost to provide necessary capital facilities. Fee revenue must be used for capacity expansions and cannot be used for operations or maintenance costs. In determining the reasonableness of these one-time fees, the fee must meet three requirements: (1) Impact / Need: The needed capital facilities are a consequence of new development; (2) Proportionality: Fees represent a proportionate share of the cost;and(3) Benefit: Revenues are managed and expended in such a way that new development receives a substantial benefit.The demographic data and analysis provided in this section provide the foundation to meet the first two requirements listed above. The development projections are used to establish a need for future infrastructure due to growth as well as to have an understanding of the possible future pace of service demands, revenues from impact fees, and projected capital expenditures.To the extent development slows or accelerates,there will be virtually no effect on the fee amount. Please note that calculations throughout are based on an analysis that was conducted using Excel software. Results are discussed using whole numbers or one- to three-digit places, which represent rounded figures. However, the analysis itself uses figures carried to their ultimate decimal places; therefore the sums and products generated in the analysis may not equal the sum or product if the reader replicates the calculation with the factors shown in the report(due to the rounding of figures shown, not in the analysis). POPULATION I To provide context for public school student enrollment growth in Orange County, the following section provides information on population and housing growth in the county. The total population residing in housing units in the county in 2010, according to the U.S. Census (corrected), was 124,244. In addition, 9,557 persons were estimated to reside in group quarters. When added together, the total estimated county population in 2010 was 133,801 (up from 115,531 in 2000, an increase of 18,270 residents over ten years).The estimated number of housing units in the county in 2010 was 55,597, an increase of 7,891 housing units since 2000. 23 31 CHCCS School Impact Fee Report(DRAFT) Estimated average household size for all types of units is 2.23 persons,which is derived by dividing persons residing in housing units by total number of housing units (124,244 population in households / 55,597 housing units= 2.23 persons per housing unit). Figure Al provides further detail on a comparison of 2000 and 2010 Census data for Orange County. Figure Al. U.S. Census Population and Housing Units 2000 2010 (Increase/(Decrease) Population in Households 105,585 124,244 18,659 Group Quarters Population 9,946 9,557 (389) Total County Population 115,531 133,801 18,270 Estimated Housing Units 47,706 55,597 7,891 Average Persons per Housing Unit 2,21 2.23 Source:U.S.Census Bureau 2010 Census The U.S. Census Bureau estimates that the July 2014 population in Orange County rose to 140,420. Additionally,TischlerBise obtained total housing unit estimates for May 2014 from Orange County, based on the County's Land Records and May 2014 Addresses GIS shapefile. Figure A2 details May 2014 housing unit counts for Orange County, CHCCS, and OCS. For CHCCS, the housing unit counts reflect units located in Chapel Hill and Carrboro and the portion of Orange County that falls within CHCCS. For OCS, building permit data includes other units in the county and the Town of Hillsborough within the OCS system. Figure A2. 2014 Housing Units Orange County Housing Units SF Detached SF Attached Multifamily Manufactured Total Total Orange County Housing Stock 36,443 2,191 14,621 4,674 57,929 Share by Type 63% 4% 25% 8% 100% Subtotal Housing Stock in CHCCSD 18,778 1,493 13,472 513 34,256 Share by Type 55% 4% 39% 2% 100% Subtotal Housing Stock in OCSD 17,665 698 1,149 4,161 23,673 Share by Type 75% 3% 5% 17% 100% Source:Orange County Land Records/GIS May 2014 Addresses shapefile It is assumed that the group quarters data remained the same from 2010(this figure is not separated from total population in non-decennial census estimates), since this figure is largely driven by University of North Carolina at Chapel Hill dormitory populations. Under that assumption,the total population living in housing units in 2014 was approximately 130,863. 24 32 CHCCS School Impact Fee Report(DRAFT) c p u a Cm rr p u °gyp Cch Based on household characteristics and discussions with County staff,as well as to ensure proportionality, five housing unit types are recommended for the OCS impact fees: (1) Single Family Detached, (2) Single Family Detached Units Less than 800 Sq. Ft., (3)Single Family Attached (e.g., townhomes), (4) Multifamily (e.g., apartments), and (5) Manufactured Homes. In the previous study, Single Family Attached and Multifamily were grouped into one category. However, they are separated in this update to track with changing development patterns. Impact fees are calculated by type of unit and bedroom count(the latter is further detailed below). As shown, a total of 3,320 new housing units were built from January 1, 2004,to December 31, 2013.The majority of new units are single family detached (almost 69 percent), followed by approximately 17 percent multifamily, and 9 percent single family attached/duplex. The remainder are manufactured homes. The mix of new units by type is used to project future housing unit growth later in this report. Further detail is provided below in Figure A3. Figure A3. Housing Unit Growth 2004-2013: OCS Net Increase Housing Units 2004 2013 2004-2013 %of New Units SF Detached 13,096 15,390 2,294 69% SF Attached/Duplex 162 451 289 9% Multifamily/Other 1,176 1,746 570 17% Manufactured Home 5,451 5,618 167 5% Total 19,885 23,205 3,320 100% Source:Orange County Ch pet HU C rr6m r Cif gyp Cc6 (C HC Based on household characteristics and to ensure proportionality, five housing unit types are recommended for the CHCCS impact fees: (1) Single Family Detached, (2) Single Family Detached Units Less than 800 Sq. Ft., (3) Single Family Attached (e.g., townhomes), (4) Multifamily(e.g., apartments) and (5) Manufactured Homes.CHCCS has a significant number of multifamily units that do not generate a large number of school-age children due to the presence of the University of North Carolina at Chapel Hill. Impact fees are calculated by type of unit and bedroom count (the latter is further detailed below). As shown, a total of 2,730 new housing units were built from January 1, 2004, to December 31, 2013. Units are relatively split between single family detached (38 percent), multifamily(34 percent), and single family detached (28 percent). Nine manufactured units were added during this time, a negligible amount. The mix of new units by type is used to project future housing unit growth later in this report. Further detail is provided below in Figure A4. 25 33 CHCCS School Impact Fee Report(DRAFT) Figure A4. Housing Unit Growth 2004-2013: CHCCS Net Increase Housing Units 2004 2013 2004-2013 %of New Units SF Detached 14,261 15,304 1,043 38% SF Attached/Duplex 2,243 3,005 762 28% Multifamily/Other 16,052 16,968 916 34% Manufactured Home 1,060 1,069 9 0% Total 33,616 36,346 2,730 100% Source:Orange County ESTIMATED TI TischlerBise calculated student generation rates for each school system in Orange County based on data from Orange County.The term "student generation rate" refers to the number of public school students per housing unit in each school system: OCS and CHCCS. Public school students are a subset of school- aged children, which includes students in private schools and home-schooled children. Student generation rates are important demographic factors that help account for variations in demand for school facilities by type of housing. Students per housing unit are held constant over the projection period since the impact fees represent a "snapshot approach" of current levels of service and costs. The student generation rates were calculated using student address data geocoded to Orange County land records tracking housing unit types. These data were analyzed for units built during two different time periods: prior to 2004, and from 2004 through 2013. Data were collated for these two discrete periods in order to evaluate whether new development patterns and demand trends in the residential market had impacted student generation rates for recently built units. Student generation rates for units constructed from 2004 to 2013 were drawn from an earlier TischlerBise study,finished in May 2015. Student generation rates were provided by housing unit type for the categories used in each district.That is,for Orange County, rates are provided for each type of unit: (1)Single Family Detached,(2)Single Family Attached/Multifamily, and (3) Manufactured Homes. For CHCCS, rates are provided for: (1) Single Family Detached, (2)Single Family Attached, (3) Multifamily,and (4) Manufactured Homes. In addition,the rates reflect demand by type of school level—elementary, middle, and high. Initially, TischlerBise and County staff attempted a simple combination of the older and newer student generation and housing unit type data in order to derive student generation rates for housing type categories that are representative of the impact of a housing unit on required school capacity over the entire life of that unit. In order to enhance the specificity of its student generation rates,the County tasked TischlerBise with determining these rates by the size of the unit,measured by bedroom count.To facilitate this process, the County had begun to gather bedroom count attributes for most new units constructed since 2004.Therefore,for the most part, student addresses for new units could be matched to a bedroom count record. 26 34 CHCCS School Impact Fee Report(DRAFT) However, bedroom counts were unavailable for units constructed prior to 2004. To determine these figures for the pre-2004 housing stock, TischlerBise used 2005-2007 American Community Survey (ACS) Public Use Microdata Sample (PUMS) data for Public Use Microdata Area (PUMA) 2900 (which includes Orange County and Chatham County)to determine the estimated mix of units by bedroom count for each housing type category.This sample period was the closest to the 2004 cut-off that was still large enough to yield accurate data.The results of this analysis are displayed below in Figure A5. Figure AS:ACS PUMS Data Bedroom Count by Category Analysis(Unweighted Sample) Housing Type Bedroom Count I Count 0-3 1,014 66.4% Single Family Detached* 4 401 26.3% 5+ 112 7.3% Total 1,527 100% 0-2 64 55.7% Single Family Attached 3+ 51 44.3% Total 115 100% 0-2 383 88.5% Multifamily 3+ 50 11.5% Total 433 100% 0-2 100 41.2% Manufactured 3+ 143 58.8% Total 243 100% *SF Detached<800 Sq. Ft. was not included because there are no bedroom count subcategories Source:2005-2007 ACS PUMS data for PUMA 2900 However, the same problems were present with data regarding students living in units constructed prior to 2004. As shown in Figure A6 and Figure A7 below, a large number of students generated were from units with unknown bedroom counts. This problem is particularly problematic in the Multifamily and Single Family Attached categories. Figure A6: OCS Student Counts Manufactured Multifamily Single Family Attached Single Family Detached Total Known 0-2I Known 3+ Unknown Known 0-2 Known 3+Unknown Known 0-2 Known 3+ Unknown Known<800 Sq.Ft.I Known 0-3 I Known 4 Known 5+ Unadjusted Elementary 580 136 96 4 3 14 5 1 153 23 1,242 319 44 2,620 Middle 231 77 42 2 1 1 1 94 7 669 177 38 1,340 High 253 107 35 1 1 2 5 1 123 8 993 235 49 1,813 Total 1,064 320 173 7 4 17 11 3 370 38 2,904 731 131 5,773 Figure A7: CHCCS Schools Student Counts Manufactured Multifamily Single Family Attached Single Family Detached Total Known 0-2 Known 3+ Unknown I Known 0-2 Known 3+ Unknown Known 0-2 Known 3+ Unknown Known<800 Sq.Ft.I Known 0-3 Known 4 Known 5+ Unadjusted Elementary 88 3 719 465 37 19 151 58 112 12 1,308 1,176 348 4,496 Middle 44 2 269 167 16 9 65 26 62 9 701 745 216 2,331 High 42 5 300 228 26 15 75 40 77 3 923 1,078 378 3,190 Total 174 10 1,288 860 79 43 291 124 251 24 2,932 2,999 942 10,017 27 35 CHCCS School Impact Fee Report(DRAFT) After testing various strategies to accurately allocate students in units with unknown bedroom counts, TischlerBise, in consultation with the County, determined there was insufficient data to include the entire housing stock.Therefore,TischlerBise, in consultation with County staff, recommends using local data on recently built units (with bedroom counts) and geocoded students data for Multifamily and Single Family Attached rates. This solution avoids a skewed student-to-units ratio that might have resulted from an inaccurate allocation of students from units with unknown bedroom counts. For Single Family Detached, Single Family Detached <800 Sq. Ft., and Manufactured Homes, students in units with unknown bedroom counts reflect less than 10 percent of the total. Therefore, pre-2004 and 2004-2013 data were combined to derive the student generation rates. For Single Family Detached, students from unknown units were allocated based upon the breakdown of students generated from units with known bedroom counts, as shown in Figure A8 and Figure A9. For instance, for OCS, a portion of the 153 elementary-level students in unknown bedroom count single family detached units (see Figure A7) are placed in the 0-3 bedroom category by calculating percentage of known students in the category out of all the known students living in single family detached homes (77.1 percent, or 2,904 / [2,904 + 731 + 131]). Therefore, 118 students (77.1% x 153) are added to the known 0-3 bedroom category(1,242 students)to yield a combined known and unknown student count of 1,360 elementary students. Figure A8: OCS Single Family Detached Units—Unknown Bedroom Count Student Allocation Single Family Detached Unknown Known 0-3 Known 4 Known 5+ Unadjusted Elementary 153 1,242 319 44 Middle 94 669 177 38 High 123 993 235 49 Total 370 2,904 731 131 77.1% 19.4% 3.5% Adjusted Known+Unknown Elementary 1,360 349 49 Middle 741 195 41 High 1,088 259 53 Total 3,189 803 144 28 36 CHCCS School Impact Fee Report(DRAFT) Figure A9: CHCCS Single Family Detached Units—Unknown Bedroom Count Student Allocation Single Family Detached Unknown Known 0-3 Known 4 Known 5+ Unadjusted Elementary 112 1,308 1,176 348 Middle 62 701 745 216 High 77 923 1,078 378 Total 251 2,932 2,999 942 42.5% 43.5% 13.7% Adjusted Known+Unknown Elementary 1,356 1,225 363 Middle 727 772 224 High 956 1,111 389 Total 3,039 3,108 976 STUDENT GENERATION RATES The 2013-2014 student generation rates for OCS and CHCCS are shown below in Figures A10 and All, respectively. Rates are provided for each of the five housing unit types used in the impact fee analysis for each level of school facility: (1) Elementary; (2) Middle; and (3) High. For Single Family Detached homes, separate rates are included for 0-2 bedroom, 3 bedroom, and 4+ bedroom units. For Single Family Attached and Multifamily units,separate rates are provided for 0-2 bedroom and 3+bedroom units. Rates for Single Family Detached <800 Sq. Ft. Units and Manufactured homes are not segmented by bedroom count given the smaller square footage of these types of units. Additionally, student generation rates are adjusted for the presence of age-restricted developments, as noted in the figure footnotes.A separate rate schedule for age-restricted developments is currently under consideration. 29 37 CHCCS School Impact Fee Report(DRAFT) Figure A10. OCS Student Generation Rates School Level Type of Unit Elementary(PK-5) Middle(6-8) High(9-12) Total Single Family Detached 0-3 Bedrooms 0.166 0.088 0.125 0.379 4+Bedrooms 0.126 0.069 0.087 0.283 Total 0.152 0.081 0.112 0.346 Single Family Detached(<800 Sq.Ft.) 0.066 0.020 0.023 0.108 Single Family Attached 0-2 Bedrooms 0.059 0.029 0.029 0.118 3+Bedrooms 0.065 0.047 0.060 0.172 Total 0.064 0.045 0.056 0.165 Multifamily 0-2 Bedrooms 0.033 0.017 0.033 0.083 3+Bedrooms 0.383 0.128 0.162 0.673 Total 0.088 0.035 0.053 0.176 Manufactured 0.136 0.057 0.068 0.262 Housing Type Category Unit Count Students SGR Single Family Detached[1][2] 0-3 Bedrooms 9,678 3,671 0.379 Elementary 1,610 0.166 Middle 847 0.088 High 1,214 0.125 4+Bedrooms 5,204 1,473 0.283 Elementary 656 0.126 Middle 362 0.069 High 455 0.087 Subtotal 14,882 5,144 0.346 Single Family Detached<800 Sq.Ft.[1] All Bedroom Counts 351 38 0.108 Elementary 23 0.066 Middle 7 0.020 High 8 0.023 Subtotal 351 38 0.108 Single Family Attached[3][4] 0-2 Bedrooms 34 4 0.118 Elementary 2 0.059 Middle 1 0.029 High 1 0.029 3+Bedrooms 232 40 0.172 Elementary 15 0.065 Middle 11 0.047 High 14 0.060 Subtotal 266 44 0.165 Multifamily[3][4] 0-2 Bedrooms 460 38 0.083 Elementary 15 0.033 Middle 8 0.017 High 15 0.033 3+Bedrooms 86 58 0.673 Elementary 33 0.383 Middle 11 0.128 High 14 0.162 Subtotal 546 96 0.176 Manufactured[1] All Bedroom Count 5,618 1,471 0.262 Elementary 766 0.136 Middle 321 0.057 High 384 0.068 Subtotal 5,618 1,471 0.262 All Types Total 21,663 6,793 0.314 [1]All housing units located in the OCS District [2]Excludes units built between 2004 and 2013 in Eno Haven,an age-restricted development requiring at least one person over 55 [3]Housing units constructed between 2004 and 2013 [4]Excludes 47 units built between 2004-2013 at Ashbury Crossing,an age restricted development where all permanent occupants must be at least 18 years old.Mix between Single Family Attached and Multifamily is assumed to be 50/50. 30 38 CHCCS School Impact Fee Report(DRAFT) Figure All. CHCCS Student Generation Rates School Level Type of Unit Elementary(K-5) Middle(6-8) High(9-12) Total Single Family Detached 0-3 Bedrooms 0.150 0.081 0.104 0.336 4+Bedrooms 0.258 0.160 0.222 0.640 Total 0.189 0.110 0.147 0.446 Single Family Detached(<800 Sq.Ft.) 0.048 0.036 0.013 0.096 Single Family Attached 0-2 Bedrooms 0.158 0.058 0.049 0.265 3+Bedrooms 0.252 0.082 0.091 0.425 Total 0.224 0.075 0.079 0.378 Multifamily 0-2 Bedrooms 0.065 0.021 0.029 0.115 3+Bedrooms 0.236 0.118 0.130 0.485 Total 0.095 0.038 0.047 0.180 Manufactured 0.088 0.045 0.046 0.179 Housing Type Category Unit Count Students SGR Single Family Detached[1] 0-3 Bedrooms 9,605 3,223 0.336 Elementary 1,437 0.150 Middle 782 0.081 High 1,004 0.104 4+Bedrooms 5,440 3,481 0.640 Elementary 1,405 0.258 Middle 868 0.160 High 1,208 0.222 Subtotal 15,045 6,704 0.446 Single Family Detached<800 Sq.Ft.[1] All Bedroom Counts 259 25 0.096 Elementary 12 0.048 Middle 9 0.036 High 3 0.013 Subtotal 259 25 0.096 Single Family Attached[2] 0-2 Bedrooms 225 60 0.265 Elementary 36 0.158 Middle 13 0.058 High 11 0.049 3+Bedrooms 537 228 0.425 Elementary 135 0.252 Middle 44 0.082 High 49 0.091 Subtotal 762 288 0.378 Multifamily[2] 0-2 Bedrooms 755 87 0.115 Elementary 49 0.065 Middle 16 0.021 High 22 0.029 3+Bedrooms 161 78 0.485 Elementary 38 0.236 Middle 19 0.118 High 21 0.130 Subtotal 916 165 0.180 Manufactured[1] All Bedroom Count 1,069 191 0.179 Elementary 94 0.088 Middle 48 0.045 High 49 0.046 Subtotal 1,069 191 0.179 All Types Total 18,051 7,373 0.408 [1]All housing units located in the CHCCS District [2]Housing units constructed between 2004 and 2013 31 39 CHCCS School Impact Fee Report(DRAFT) Additionally, TischlerBise calculated a generation rate for age-restricted units (those units in developments that restrict the number of units with occupants aged under 55 years old) based on data provided by Epcon Communities.This type of community is relatively new to the development landscape in the Raleigh-Durham-Chapel Hill region. Figure Al2 shows available data, which yields a student generation rate of 0.019. As these developments reach maturity and other age-restricted communities come to market, TischlerBise recommends updating the student generation rate calculation for age- restricted units. Figure Al2. Age-Restricted Student Generation Rates Development Location Homes Head of Household<55 y.o. School Age Childre Courtyards at Culp Arbor Durham, NC 69 2 0 Courtyards at Cary Cary, NC 15 0 0 Courtyards at Okelly-Chapel Cary, NC 22 2 0 Villas at Maple Creek Westerville, OH 52 2 3 158 6 3 Student Generation Rate 0,019 PUBLIC SCHOOL STUDENT ENROLLMENT TRENDS AND SAPFO PROJECTIONS This section provides a summary of historical enrollment trends and projected enrollment growth for each school district. r p p c w l tgyp Rh Is Historical Enrollment Since the 2005-2006 school year, enrollment in OCS has increased by a total of 806 students with some fluctuation from year to year. Current total membership for the 2015-2016 school year (captured November 13, 2015) is 7,526. Yearly data for the past 10 years as well as the current actual enrollment are shown below in Figure A13 for OCS. Figure A13. Historical Public School Enrollments: OCS 12005-200612006-200712007-200812008-200912009-201012010-2011 12011-201212012-20131 2013-2014 I 2014-2015 2015-2016(11 I Annual Growth Rate Elementary 3,006 EIMMEMEMEIM®EEMEIMMEZZEMIE=MME=Malff= MEMM1=0====MM®MEM®=EM 1.0% --------- Net Increase 312 Middle .3BIE®'.t EISEEMEDIEMESE 1,698 E 1,684 MKE=MES=M313= ®MEM®MEM®0®M:M®® 0.9% --------- Net Increase 149 High EIIEMEEMMEMMERIM®®ERIM®MMEMMRIE= 2,469 MEMMEMMEM®©MMM®MEIMWIM® 1.5% --------- Net Increase 345 Total Increase/D1ci reuse) 116 160 12 85 112 130 67 199 (78) 3 Total Membership 6,720 6,836 6,996 7,008 7,093 7,205 7,335 7,402 7,601 7,523 7,526 Total Increase +806 Source:Orange County,NC Schools Adequate Public Facilities Ordinance,Annual Report,2015 11)SAPFO Capture Date Membership,Nov.13,2015 32 40 CHCCS School Impact Fee Report(DRAFT) Student Enrollment Projections Enrollment projections for OCS are based on historical actual student growth as part of the County's current Schools Adequate Public Facilities Ordinance (SAPFO) and detailed in the 2015 SAPFO Annual Report. The SAPFO system projects enrollment for two separate functions or activities; capital improvement planning (CIP) and growth management. One projection methodology is used in capital planning and a separate projection system is used to manage the impacts of new unbuilt development. The SAPFO Certificate of Adequate Public Schools(CAPS)system records new development approvals and determines whether capacity will be available in the prescribed year. If capacity is projected to be available then the development is allowed to proceed; if capacity is not projected to be available, the certificate is not issued until capacity is made available either by changes in enrollment or new capital improvements. This system helps synchronize capital needs and future growth by monitoring historic trends and new growth patterns that may match or exceed past growth. In established, constant growth school districts, the SAPFO CIP system usually adequately reflects future growth. As shown in Figure A14, current enrollment in OCS is 7,526. By the school year 2025-26, OCS is projected to have a total enrollment of 8,060, a total increase of 10-year increase of 534 students. This represents an average annual growth rate of approximately 0.7% percent. Yearly detail by school level is provided below. Figure A14. Projected Public School Enrollments: OCS 120154016]I]1 2016-2017 1 2017-2018 1 2018-2019 1 2019-2020 1 2020-2021 2021-2022 1 2022-2023 I 2023-2024 I 2024 4025 I 20254026 I Annual Growth Rate Elementary '®" ' ®ENIMMIEM®MIEEMMIEMMIZE®®� -0®®®EMMEMMEM=EMME■■:1E■ 0.8% NBt14474474 !276 Middle MNIMMEIMENIIMMEIM 1,846 ENCIMMIEMENEMME=M:E=■31ME■ -0®EEMMM®®®MEMMil:■■31:■ 0.7% Net14474474 !118 High '®" ' 2,469 MIEMMEEEM®EMIBM 2,604 ! 2,669 =ME= 2,608 2,609 ®®®ME=MM®®®®0 0.6% Netlncrase 1140 !� Net Increase 46 51 43 71 47 46 87 46 33 64 Total 7,526 7,572 7,623 7,666 7,737 7,784 7,830 7,917 7,963 7,996 8,060 Total Increase !.534 >.- (1]SAPFO Capture Date Membership,Nov.13,2015 Source:Orange County,NCSchools Adequate Public Facilities Ordinance,Annual Report,2016(March Draft) Ch bpi UPC rr m r. Cif gyp kb Is Historical Enrollment Since the 2005-2006 school year, enrollment has increased by a total of 1,121 students with some fluctuation from year to year. Current total enrollment for the 2015-2016 school year is 12,086. Yearly data for the past 10 years as well as the current actual enrollment are shown below in Figure A15 for CHCCS. 33 41 CHCCS School Impact Fee Report(DRAFT) Figure A15. Historical Public School Enrollments: CHCCS t t t Enrollment/Membership 4,879 4,980 5,173 5,302 5,219 5,296 5,464 5,543 5,554 5,541 t 5,501 Increase/(Decrease) 101 193 129 (83) 77 168 79 11 (13) (40) 1.2% Enrollment/Membership 2,572 2,592 2,622 2,697 2,708 2,722 2,753 2,785 F'8S 2,861 2,884 Increase/(fDecrease) 20 30 75 11 14 31 32 3 23 1.2% Enrollment/Membership 3,514 3,520 3,635 3,630 3,606 3,640 3,714 3,796 3,730 Increase/(Decrease) 6 115 (5) (24) 34 74 82 (34) (29) 0.5% Totallncrease/(fJecrease) 127 338 199 (96) 125 273 193 (44) (46) Total Enroll/Membership 10,965 11,092 11,430 11,629 11,533 11,658 11,931 12,124 12,132 12,086 1.0% Source:Orange County,NCSchools Adequate Public Facilities Ordinance,Annual Report,2015 (11 Official SY15-16 Enrollment Student Enrollment Projections Projections are from the SAPFO 2015 Annual Report. The projections are based on historic growth. As shown, current enrollment in CHCCS is 12,086. By the school year 2025-26, CHCCS is projected to have a total enrollment of 13,172. This represents an average annual growth rate of approximately 0.9 percent and a growth of 1,086 students over the ten-year period.Yearly detail by school level is provided in Figure A16 below. Figure A16. Projected Public School Enrollments: CHCCS Enrollment/Membership t 5,501 12016-2017 5,552 12017-2018 5,584 12018-201.9 5,622 15,634 t 12020-2021 5,699 12021-2022 5,768 12022-2023 5,835 2023-2024 5,902 2024-202.5 5,966 16,Mu Increase/(7ecrense/ 51 32 38 12 65 69 67 67 64 64 0.9% Enrollment/Membership 2,884 2,830 2,854 2,915 2,995 2,996 2,997 2,974 3,006 3,045 3,084 Increase/(Decrease) (54) 24 61 80 1 1 (23) 32 39 39 0.7% Enrollment/Membership 3,701 3,757 3,820 3,842 3,857 3,883 3,917 4,013 4,041 4,045 4,058 Increase/(Decrease) 56 63 22 15 26 34 96 28 4 Netlncrease 53 119 121 107 92 104 140 127 107 116 Total 12,086 12,139 12,258 12,379 12,486 12,578 12,682 12,822 12,949 13,056 13,172 0.9% [31 Official SY15-16 Enrollment Source:Orange County,NCSchools Adequate Public Facilities Ordinance,Annual Report,2016(March Draft) HOUSING I T PROJECTIO Because SAPFO does not account for the portion of enrollment growth driven by new development, TischlerBise undertook its own analysis of potential housing unit growth and resulting student generation from new housing. These projections reflect anticipated growth throughout the county including the Orange County side of the City of Mebane (within the OCS system) and Chapel Hill and Carrboro. Future housing unit projections were derived for each school system using average annual permitting data from 2004-2013 (detailed in Figures A3 and A4).This recent trend data includes periods before and after the "Great Recession;" therefore, it is deemed a reliable predictor of average annual growth and future housing mix. During this time, the OCS District grew by 332 units per year and the CHCCS District grew by an average of 273 units annually.These figures were adjusted to increase by 20%in OCS and 25%in CHCCS based on the large number of approved but unbuilt units in both districts. Therefore, OCS is projected forward at 398 units per year and CHCCS at 341 units per year. 34 42 CHCCS School Impact Fee Report(DRAFT) Distribution by type of unit for each district is shown in Figure A17 (single family categories are combined below for the projections). The percentages reflect the share of new units constructed, as opposed to percent of total housing stock. In other words, the net increase in units is allocated to each housing unit category according to the percentages shown. These numbers are based on mixes from 2004-2013 permitting data but are adjusted based on knowledge of approved permits currently in the development pipeline. In both cases, staff expect larger numbers of multifamily and single family attached units than in prior years. As delineated in Figure A17, the County is anticipated to experience residential development growth in both school systems. OCS is projected to increase by 3,980 units and CHCCS by 3,410 units over the next ten years. This totals 7,390 units county-wide, slightly less than the number of units the county was estimated to have added (7,891) between 2000 and 2010(see Figure Al). Figure A17. Combined Housing Unit Projections Projected Base Yr. 1 2 3 4 5 6 7 8 9 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 HOUSING UNITS %of Orange County Schools New Units Single Family Detached 60.0% 17,904 18,143 18,381 18,620 18,859 19,098 19,337 19,575 19,814 20,053 20,292 Single Family Attached 15.0% 758 817 877 937 997 1,056 1,116 1,176 1,235 1,295 1,355 Multifamily 20.0% 1,229 1,308 1,388 11467 1,547 11627 1,706 1,786 1,865 1,945 2,025 Manufactured Homes 5.0% 4,181 4,201 4,221 4,241 4,261 4,280 4,300 4,320 4,340 4,360 4,380 Total 24,071 24,469 24,8671 25,265 25,6631 26,061 26,4591 26,857 27,255 27,653 28,051 Net Increase in Units 398 398 398 398 398 398 398 398 398 398 Total Increase 3,980 of Chapel Hill-Carrboro Schools New Units Single Family Detached 20.0% 18,846 18,914 18,983 19,051 19,119 19,187 19,255 19,324 19,392 19,460 19,528 Single Family Attached 15.0% 1,544 1,595 1,646 1,698 1,749 11800 1,851 1,902 1,953 2,005 2,056 Multifamily 65.0% 13,694 13,915 14,137 14,359 14,580 14,802 15,024 15,245 15,467 15,689 15,910 Manufactured Homes 0.0% 513 513 513 513 513 513 513 513 513 513 513 Total 34,5971 34,938 35,2791 35,6201 35,9611 36,3021 36,6431 36,9841 37,3251 37,666 38,007 Net Increase in Units 341 341 341 341 341 341 341 341 341 341 Total Increase 3,410 Total County Increase 7,390 Total County Total County Housing Units 58,668 59,407 60,146 60,885 61,624 62,363 63,102 63,841 64,580 65,319 66,058 35 43 CHCCS School Impact Fee Report(DRAFT) Appendix Impact Orange County has been granted authority by the State of North Carolina to implement impact fees for schools, the acquisition of land for open space and greenways, capital improvements to public streets, bridges, sidewalks, bikeways, on and off street surface water drainage ditches, pipes, culverts, other drainage facilities, water and sewer facilities and public recreation facilities. The County is pursuing impact fees for schools at this time.A copy of the applicable sections of the Act is provided in this Appendix. 36 44 CHCCS School Impact Fee Report(DRAFT) Note: Only Title VI(Orange County Impact Fees) is shown. GENERAL ASSEMBLY OF NORTH CAROLINA 1987 SESSION CHAPTER 460 HOUSE BILL 917 AN ACT MAKING SUNDRY AMENDMENTS CONCERNING LOCAL GOVERNMENTS IN ORANGE AND CHATHAM COUNTIES. TITLE VI. ORANGE COUNTY IMPACT FEES. Sec. 17. G.S. 153A-331 is amended by identifying the existing provisions as subsection (a) and by adding new subsections to read: "(b) Impact Fees Authorized. (1) Orange County may provide by ordinance for a system of impact fees to be paid by developers to help defray the costs to the County of constructing certain capital improvements,the need for which is created in substantial part by the new development that takes place within the County. (2) For purposes of this subsection, the term capital improvements includes the acquisition of land for open space and greenways, capital improvements to public streets, schools, bridges, sidewalks, bikeways, on and off street surface water drainage ditches,pipes, culverts, other drainage facilities, water and sewer facilities and public recreation facilities. (3) An ordinance adopted under this subsection may be made applicable to all development that occurs within the County. (c) Amount of Fees. In establishing the amount of any impact fee, the County shall endeavor to approach the objective of having every development contribute to a capital improvements fund an amount of revenue that bears a reasonable relationship to that development's fair share of the costs of the capital improvements that are needed in part because of that development. In fulfilling this objective, the County shall, among other steps and actions: (1) Estimate the total cost of improvements by category (e.g., streets, sidewalks, drainage ways, etc.)that will be needed to provide in a reasonable manner for the public health, safety and welfare of persons residing within the County during a reasonable planning period not to exceed 20 years. The Board of County Commissioners may divide the County into two or more districts and estimate the costs of needed improvements within each district. These estimates shall be periodically reviewed and updated and the planning period used may be changed from time to time. (2) Establish a percentage of the total costs of each category of improvement that, in keeping with the objective set forth above, should fairly be borne by those paying the impact fee. (3) Establish a formula that fairly and objectively apportions the total costs that are to be borne by those paying impact fees among various types of developments. By way of illustration without limitation: a. In the case of street improvements,the impact fee may be related to the number of trips per day generated by different types of uses according to recognized estimates; 37 45 CHCCS School Impact Fee Report(DRAFT) b. In the case of drainage improvements,the impact fee may be related to the size of a development, the amount of impervious surface the development has, or other factors that bear upon the degree to which a development contributes to the need for drainage improvements made at public expense. (d) Capital Improvements Reserve Funds: Expenditures. (1) Impact fees received by the County shall be deposited in a capital improvements reserve fund or funds established under Chapter 159 of the General Statutes, Article 3, Part 2. Such funds may be expended only on the type of capital improvements for which such impact fees were established, and then only in accordance with the provision of subsection(2) of this section. (2) In order to ensure that impact fees paid by a particular development are expended on capital improvements that benefit that development,the County may establish for each category of capital improvement for which it collects an impact fee at least two geographical districts or zones, and impact fees generated by developments within those districts or zones must be spent on improvements that are located within or that benefit property located within those districts or zones. (e) Credits for Improvements. An impact fee ordinance shall make provision for credits against required fees when a developer installs improvements of a type that generally would be paid for by the County out of a capital reserve account funded by impact fees. The ordinance may spell out the circumstances under which a developer will be allowed to install such improvements and receive such credits. (f) Appeals Procedure. An ordinance authorizing impact fees as provided herein may provide that any person aggrieved by a decision regarding an impact fee may appeal to the Orange County Board of Adjustment. If the ordinance establishes an appeals procedure, it shall spell out the time within which the appeal must be taken to the board of adjustment,the possible grounds for an appeal and the board's authority in the matter, whether the fee must be paid prior to resolution of the appeal, and other procedural or substantive matters related to appeals. Any decision by the board of adjustment shall be subject to review by the superior court by proceedings in the nature of certiorari in the same manner as is provided in G.S. 153A-345. (g) Payment of Impact Fees. An ordinance authorizing impact fees as herein provided shall spell out when in the process of development approval and construction impact fees shall be paid and by whom. By way of illustration without limitation,the ordinance may provide that an applicant for a building permit shall submit the impact fee along with the permit application and that building permits shall not be issued until the impact fee has been paid. (h) Refunds. If this section or any ordinance adopted thereunder is declared to be unconstitutional or otherwise invalid, then any impact fees collected shall be refunded to the person paying them together with interest at the rate established under G.S. 105-241.1, being the same rate paid by the Secretary of Revenue on refunds for tax overpayments. (1) Limitations on Actions. (1) Any action contesting the validity of an ordinance adopted as herein provided must be commenced not later than nine months after the effective date of such ordinance. (2) Any action seeking to recover an impact fee must be commenced not later than nine months after the impact fee is paid." Sec. 17.1. Section 17 of this act shall apply only to Orange County, and applies only within the planning jurisdiction of Orange County. Sec. 18. G.S. 153A-340 is amended by identifying the existing provisions as subsection (a) and by adding new subsections to read: "(b) Impact Fees Authorized. (1) Orange County may provide by ordinance for a system of impact fees to be paid by developers to help defray the costs to the County of constructing certain capital 38 46 CHCCS School Impact Fee Report(DRAFT) improvements,the need for which is created in substantial part by the new development that takes place within the County. (2) For purposes of this subsection, the term capital improvements includes the acquisition of land for open space and greenways, capital improvements to public streets, schools, bridges, sidewalks, bikeways, on and off street surface water drainage ditches, pipes, culverts, other drainage facilities, water and sewer facilities and public recreation facilities. (3) An ordinance adopted under this subsection may be made applicable to all development that occurs within the County. (c) Amount of Fees. In establishing the amount of any impact fee, the County shall endeavor to approach the objective of having every development contribute to a capital improvements fund an amount of revenue that bears a reasonable relationship to that development's fair share of the costs of the capital improvements that are needed in part because of that development. In fulfilling this objective, the County shall, among other steps and actions: (1) Estimate the total cost of improvements by category (e.g., streets, sidewalks, drainage ways, etc.)that will be needed to provide in a reasonable manner for the public health, safety and welfare of persons residing within the County during a reasonable planning period not to exceed 20 years. The Board of County Commissioners may divide the County into two or more districts and estimate the costs of needed improvements within each district. These estimates shall be periodically reviewed and updated and the planning period used may be changed from time to time. (2) Establish a percentage of the total costs of each category of improvement that, in keeping with the objective set forth above, should fairly be borne by those paying the impact fee. (3) Establish a formula that fairly and objectively apportions the total costs that are to be borne by those paying impact fees among various types of developments. By way of illustration without limitation: a. In the case of street improvements,the impact fee may be related to the number of trips per day generated by different types of uses according to recognized estimates; b. In the case of drainage improvements,the impact fee may be related to the size of a development, the amount of impervious surface the development has, or other factors that bear upon the degree to which a development contributes to the need for drainage improvements made at public expense. (d) Capital Improvements Reserve Funds: Expenditures. (1) Impact fees received by the County shall be deposited in a capital improvements reserve fund or funds established under Chapter 159 of the General Statutes, Article 3, Part 2. Such funds may be expended only on the type of capital improvements for which such impact fees were established, and then only in accordance with the provision of subsection(2) of this section. (2) In order to ensure that impact fees paid by a particular development are expended on capital improvements that benefit that development,the County may establish for each category of capital improvement for which it collects an impact fee at least two geographical districts or zones, and impact fees generated by developments within those districts or zones must be spent on improvements that are located within or that benefit property located within those districts or zones. (e) Credits for Improvements. An impact fee ordinance shall make provision for credits against required fees when a developer installs improvements of a type that generally would be paid for by the County out of a capital reserve account funded by impact fees. The ordinance may spell out the 39 47 CHCCS School Impact Fee Report(DRAFT) circumstances under which a developer will be allowed to install such improvements and receive such credits. (f) Appeals Procedure. An ordinance authorizing impact fees as provided herein may provide that any person aggrieved by a decision regarding an impact fee may appeal to the Orange County Board of Adjustment. If the ordinance establishes an appeals procedure, it shall spell out the time within which the appeal must be taken to the board of adjustment,the possible grounds for an appeal and the board's authority in the matter, whether the fee must be paid prior to resolution of the appeal, and other procedural or substantive matters related to appeals. Any decision by the board of adjustment shall be subject to review by the superior court by proceedings in the nature of certiorari in the same manner as is provided in G.S. 153A-345. (g) Payment of Impact Fees. An ordinance authorizing impact fees as herein provided shall spell out when in the process of development approval and construction impact fees shall be paid and by whom. By way of illustration without limitation,the ordinance may provide that an applicant for a building permit shall submit the impact fee along with the permit application and that building permits shall not be issued until the impact fee has been paid. (h) Refunds. If this section or any ordinance adopted thereunder is declared to be unconstitutional or otherwise invalid, then any impact fees collected shall be refunded to the person paying them together with interest at the rate established under G.S. 105-241.1, being the same rate paid by the Secretary of Revenue on refunds for tax overpayments. (1) Limitations on Actions. (1) Any action contesting the validity of an ordinance adopted as herein provided must be commenced not later than nine months after the effective date of such ordinance. (2) Any action seeking to recover an impact fee must be commenced not later than nine months after the impact fee is paid." Sec. 18.1. Section 18 of this act shall apply only to Orange County, and applies only within the planning jurisdiction of Orange County. In the General Assembly read three times and ratified this the 23rd day of June, 1987. 40 48 CHCCS School Impact Fee Report(DRAFT) Appendix C: • • - For the purposes of school impact fee analysis and calculations, the following housing type categories were used. A brief description of each housing category is provided. Single Family Detached: a detached building located on a single lot containing one dwelling unit. In situations where an accessory dwelling unit (i.e., a "mother-in-law suite" or "granny flat") is located on the same lot,the principal dwelling is categorized as a Single Family Detached dwelling. Examples of single family detached dwellings are site-built houses and modular houses. Single Family Attached: a group of dwelling units which share a common floor-to-ceiling wall or share the wall of an attached garage or porch with an adjacent dwelling and in which all units have a ground- floor living space. Units are individually owned or intended to be individually owned after initial sales are complete. Examples of single family attached dwellings are duplexes, triplexes, townhouses, row houses, and condominiums in which all units have a ground-floor living space. Multifamily: a group of dwelling units which share a common floor-to-ceiling wall with an adjacent dwelling. All units may not have a ground-floor living space. Units may be individually owned (as is the case with condominiums) or may be owned by one entity and rented/leased to tenants. Also included in this category are dwelling units located above ground-floor non-residential (i.e., retail or office) uses. In situations where an accessory dwelling unit (i.e., a mother-in-law suite, granny flat, or efficiency apartment) is located on the same lot as a principal dwelling,the accessory dwelling unit is categorized as a multifamily dwelling provided the accessory dwelling unit is categorized as such by the local zoning code (i.e., less than 750-800 square feet, depending on the specifics of the local code). Examples of multifamily dwellings include apartments, condominiums in a multi-story building in which all units do not have a ground-floor living space, mother-in-law suites and granny flats located on a lot containing a separate principal dwelling, and dwellings located above non-residential uses. Manufactured home: a dwelling built in a factory in accordance with the federal Manufactured Home Construction and Safety Standards, commonly referred to as the 'HUD' Code. Examples of manufactured homes are single-wide, double-wide, and triple-wide"mobile" homes. Age Restricted Unit: A dwelling, regardless of type (detached, attached, multi-family, etc.), located in a development that restricts the number of units with occupants aged under 55 years old and whereby the age restriction is achieved by deed restrictions, homeowners association documents, and/or restrictive covenants. 41 49 Attachment 2 C) SCHOOL IMPACT FEE STUDY DRAFT Prepared for Orange County, North Carolina August 15, 2016 TischlerBise FISCAL I ECONOMIC I PLANNING 4701 Sangamore Road, Suite S240 Bethesda, MD 20816 800-424-4318 www.tischierbise.com 50 nCS Schools Impact Fee Report(DRAFT) TABLE OFCONTENTS EXECUTIVESUMMARY.......................................................................................................................1 IMPACT FEE METHODOLOGIES ..............................................................................................................l MAXIMUM SUPPORTABLE SCHOOL IMPACT FEES.......................................................................................2 Figure 1 Maximum Supportable School Impact Fees:O{3..................................................................................3 OVERVIEW.........................................................................................................................................5 LEGALFRAMEWORK ...........................................................................................................................5 REQUIREDFINDINGS...........................................................................................................................5 METHODOLOGIES AND CREDITS.............................................................................................................6 ORANGE COUNTY SCHOOLS IMPACT FEE OVERVIEW...........................................................................8 STUDENT GENERATION RATES............................................................................................................9 Figure I Student Generation Rates:O{3...........................................................................................................10 Figure I Age-Restricted Unit Generation Rates.................................................................................................10 IMPACT FEES:ORANGE COUNTY SCHOOLS........................................................................................11 METHODOLOGY...............................................................................................................................ll Figure 4i Impact Fee Methodology Chart:O{3--------------------------------'11 BUILDING LEVEL Op SERVICE STANDARDS...............................................................................................l2 FigureI LOS Standards:O{3.............................................................................................................................1Z Figure6O{3 Elementary Schools......................................................................................................................1Z Figure ZO{3 Middle Schools.............................................................................................................................13 Figure8. O{3 High Schools.................................................................................................................................13 SCHOOL CONSTRUCTION COSTS...........................................................................................................14 Figure9.School Project Costs.............................................................................................................................14 PORTABLE CLASSROOM COSTS............................................................................................................14 SUPPORT FACILITIES..............................................................14 Figure 1(\Support Facilities—O{3.....................................................................................................................14 Figure 11 Support Facilities—Serving O{3 and{}/[{3......................................................................................15 Bus/VEHICLES COSTS......................................................................................................................l5 Figure 1I Buses/Vehicles LOS and Costs:O{3.................................................................................................15 ADJUSTMENT FOR NON-LOCAL FUNDING...............................................................................................l5 CREDIT FOR FUTURE PRINCIPAL PAYMENTS Om SCHOOL IMPROVEMENTS......................................................l5 Figure 1I {}edit/or Future Principal Payments:O{3........................................................................................16 SCHOOL IMPACT FEE INPUT VARIABLES .................................................................................................l6 Figure 14i Schools Impact Fee Input Variables:O{3..........................................................................................17 MAXIMUM SUPPORTABLE IMPACT FEES FOR ORANGE COUNTY SCHOOLS......................................................l7 ii 51 OCS Schools Impact Fee Report(DRAFT) Figure 15. Maximum Supportable Schools Impact Fees:OCS............................................................................18 CASHFLOW PROJECTIONS................................................................................................................19 Figure 16. Cash Flow Projections:OCS...............................................................................................................19 IMPLEMENTATION AND ADMINISTRATION.......................................................................................20 ACCOUNTING.................................................................................................................................. COSTUPDATES................................................................................................................................ CREDITS AND REIMBURSEMENTS.......................................................................................................... COLLECTION AND EXPENDITURE ZONES .................................................................................................21 IMPACTFEE ACT.............................................................................................................................. 1 APPENDIX A: DEMOGRAPHIC DATA..................................................................................................22 OVERVIEW..................................................................................................................................... POPULATION AND HOUSING GROWTH .................................................................................................. Figure Al. U.S. Census Population and Housing Units.......................................................................................23 FigureA2. 2014 Housing Units...........................................................................................................................23 Figure A3. Housing Unit Growth 2004-2013:OCS..............................................................................................24 Figure A4. Housing Unit Growth 2004-2013:CHCCS..........................................................................................25 ESTIMATED STUDENT GENERATION RATES............................................................................................. Figure A5:ACS PUMS Data Bedroom Count by Category Analysis(Unweighted Sample).................................26 Figure A6:OCS Student Counts...........................................................................................................................26 Figure AT CHCCS Schools Student Counts..........................................................................................................26 Figure A8:OCS Single Family Detached Units—Unknown Bedroom Count Student Allocation.........................27 Figure A9:CHCCS Single Family Detached Units—Unknown Bedroom Count Student Allocation.....................28 STUDENT GENERATION RATES............................................................................................................. APPENDIX B: IMPACT FEE ACT..........................................................................................................29 APPENDIX C: HOUSING UNIT TYPES..................................................................................................34 iii 52 OCS school Impact Fees Report(DRAFT) Executive Summary TischlerBise was retained by Orange County, North Carolina,to calculate impact fees for public schools to meet the demands generated by new residential development for school facilities in the county. The County has been granted authority by the State to implement impact fees for Schools.'The purpose of the legislation is to "help defray the costs to the county of constructing certain capital improvements,the need for which is created in substantial part by the new development that takes place within the county.112 Impact fees are one-time payments used to defray the cost impacts of school facilities necessary to accommodate new development. The payment amount represents new growth's fair share of capital facility needs. TischlerBise evaluated possible methodologies and documented appropriate demand indicators by type of development for the fee amounts. Specific capital costs have been identified using local data and current dollars. Level-of-Service (LOS) standards and cost factors are presented in this report and are the basis for the calculations. It should be noted that although growth affects both capital and operating expenses incurred by schools,the impact fee analysis addresses new development's impact on capital facilities only. It is further limited to capital improvements that provide additional capacity as opposed to maintenance or rehabilitation. Orange County is served by two school systems, OCS and CHCCS. TischlerBise analyzed and calculated school impact fees for each school system. This report details the results of the OCS impact fees. The CHCCS report is issued under separate cover. IMPACT FEE METHODOLOGIES There are three basic methodologies used to calculate impact fees. The incremental expansion method documents the current LOS for each type of public facility in both quantitative and qualitative measures. The intent is to use fee revenue to expand or provide additional facilities,as needed to accommodate new development, based on the current cost to provide capital improvements. The plan-based method is commonly used for public facilities that have adopted plans or engineering studies to guide capital improvements, such as utility systems. A third approach, known as the cost recovery method, is based on the rationale that new development is paying for its share of the useful life and remaining unused capacity of an existing facility or land. Maximum supportable school impact fees for OCS are derived using the incremental expansion approach. For school capital improvements, the most common methodology employed is typically the incremental expansion method when future capacity needs are anticipated. This approach allows for the greatest 1 S.L.1987-460("An Act Making Sundry Amendments Concerning Local Governments In Orange And Chatham Counties,Title VI: Orange County Impact Fees"). In addition to schools, other community service facility categories are allowed such as: the acquisition of land for open space and greenways,capital improvements to public streets,bridges,sidewalks,bikeways,on-and off-street surface water drainage ditches,pipes,culverts,other drainage facilities,water and sewer facilities and public recreation facilities.(See Appendix B for a copy of the applicable section of the Act.) z Ibid,Sec.17(b)(1). 1 53 OCS Schools Impact Fee Report(DRAFT) flexibility in providing future capacity improvements. Under this methodology, the fees are based on current LOS and project costs for each type of school facility(i.e., elementary, middle, and high), support facilities, portable classrooms, and buses. . Land for school sites is not a component of the fee, since the draft 2016 Orange County, NC Schools Adequate Public Facilities Ordinance Annual Report indicates "renovation and expansion to existing facilities may delay construction of new schools further into the future."' Therefore, new land acquisition is not required at this time. The LOS is documented and the intent is to use fee revenue to provide additional or expanded public school and related facilities as needed to accommodate new development. The current LOS and capital costs for new or expanded facilities are used to derive a cost per student for each type of school facility. Using the cost per student and the average OCS student generation rate by type of unit, a cost by type of residential unit is derived.The term "student generation rate" refers to the average number of public school students per housing unit in the OCS system. Further discussion on student generation rate calculations is provided in the body of this report and in Appendix A. A general requirement common to impact fee calculations is the evaluation of credits.Two types of credits should be considered, future revenue credits and site-specific credits. Revenue credits are necessary to avoid potential double payment situations arising from the payment of a one-time impact fee plus the payment of other revenues that may also fund growth-related capital improvements. Revenue credits are dependent upon the fee methodology used in the cost analysis. To avoid this potential double payment situation,future revenue credits are integrated into the fee to account for outstanding debt on OCS school facilities.A credit is necessary since new residential units that will pay the fee will also contribute to future principal payments on this remaining debt through property taxes. A credit is not necessary for interest payments because interest costs are not included in the costs. The second type of credit, a site-specific credit, is for system improvements that have been included in the fee calculations. Policies and procedures related to site-specific credits for system improvements should be addressed in the ordinance that establishes the County's impact fees. However, the general concept is that developers may be eligible for site-specific credits or reimbursements only if they provide system improvements that have been included in the fee calculations. Project improvements normally required as part of the development approval process are not eligible for credits against impact fees. MAXIMUM L SCHOOL IMPACT Figure 1 provides the schedule of maximum supportable school impact fees for OCS in Orange County, North Carolina. For a single-family detached housing unit, the maximum supportable fee amount is $12,044 for a 0-3 bedroom unit, $8,952 for a 4+ bedroom unit, and $3,317 for a unit that is less than 800 square feet; for a single family attached unit,the fee is$3,665 for a 0-2 bedroom unit and $5,558 for a 3+ bedroom unit; for a multifamily unit, the fee is $2,656 for a 0-2 bedroom unit and $20,677 for a 3+ bedroom unit; and for a manufactured home, the maximum fee amount is $8,127 per unit. Additionally, 3 SAPFOTAC,2016 Orange County,NC Schools Adequate Public Facilities Ordinance(draft),p.iii. 2 54 OCS Schools Impact Fee Report(DRAFT) age-restricted units (those units in developments that restrict the number of units with occupants aged under 55 years old) have a maximum fee amount of $623. All fees should be collected when building permits are issued. School impact fees are applied only to residential development and are per housing unit, reflecting the proportionate demand by type of unit.The amounts shown are "maximum supportable" amounts based on the methodologies, LOS, and costs for the capital improvements identified herein. The fees represent the highest amount feasible for each type of applicable development, which represent new growth's fair share of the capital costs as detailed in this report. The County can adopt amounts that are lower than the maximum amounts shown. However, a reduction in fee revenue will necessitate an increase in other revenues, a decrease in planned capital expenditures, and/or a decrease in LOS. Figure 1. Maximum Supportable School Impact Fees: OCS MAXIMUM ALLOWABLE SCHOOL IMPACT FEES:Orange County Schools Impact Fee per Housing Unit Elementary Middle High TOTAL Single Family Detached 0-3 Bedrooms $4,502 $3,239 $4,303 $12,044 4+Bedrooms $3,417 $2,540 $2,995 $8,952 Single Family Detached Average $4,122 $2,981 $3,856 $10,959 Single Family Detached(<800 Sq.Ft.) $1,790 $736 $791 $3,317 Single Family Attached 0-2 Bedrooms $1,600 $1,067 $998 $3,665 3+Bedrooms $1,763 $1,730 $2,065 $5,558 Single Family Attached Average $1,735 $1,656 $1,928 $5,319 Multifamily 0-2 Bedrooms $895 $625 $1,136 $2,656 3+Bedrooms $10,388 $4,712 $5,577 $20,677 Multifamily Average $2,386 $1,288 $1,824 $5,498 Manufactured Unit $3,688 $2,098 $2,341 $8,127 Age-Restricted Unit F $623 As another option,the County could choose to adopt fees that consolidate bedroom count subcategories within a broader housing unit category. For instance, Single Family Detached homes,which the proposed fee schedule currently divides into two subcategories(0-3 Bedrooms and 4+ Bedrooms), could be charged a single fee regardless of size. If the County decides to pursue this alternative option, the average impact fee by type of unit provided in this report would be the impact fee amount on the adopted schedule. A note on rounding: Calculations throughout this report are based on an analysis conducted using Excel software. Most results are discussed in the report using one,two, and three digit places, which represent rounded figures. However, the analysis itself uses figures carried to their ultimate decimal places; therefore,the sums and products generated in the analysis may not equal the sum or product if the reader 3 55 OCS Schools Impact Fee Report(DRAFT) replicates the calculation with the factors shown in the report (due to the rounding of figures shown, not in the analysis). 4 56 OCS Schools Impact Fee Report(DRAFT) • Impact fees are one-time payments used to fund capital improvements necessitated by new growth.This type of fee has been utilized by local governments in various forms for at least 50 years. Impact fees have limitations and should not be regarded as the total solution for infrastructure financing needs. Rather, they should be considered one component of a comprehensive portfolio to ensure adequate provision of public facilities with the goal of maintaining current LOS in a community in the face of new growth. Any community considering impact fees should note the following limitations: • Impact fees can only be used to finance capital infrastructure and cannot be used to finance ongoing operations and/or maintenance and rehabilitation costs; • Impact fees cannot be deposited in the local government's General Fund: the funds must be accounted for separately in individual accounts and earmarked for the capital expenses for which they were collected; and • Impact fees cannot be used to correct existing infrastructure deficiencies unless there is a funding plan in place to correct the deficiency for all current residents and businesses in the community. LEGAL FRAMEWORK U.S. Constitution. Like all land use regulations, development exactions—including impact fees—are subject to the Fifth Amendment prohibition on taking of private property for public use without just compensation. Both state and federal courts have recognized the imposition of impact fees on development as a legitimate form of land use regulation, provided the fees meet standards intended to protect against regulatory takings. To comply with the Fifth Amendment, development regulations must be shown to substantially advance a legitimate governmental interest. In the case of impact fees, that interest is the protection of public health, safety, and welfare by ensuring that development is not detrimental to the quality of essential public services. There is little federal case law specifically dealing with impact fees, although other rulings on other types of exactions (e.g., land dedication requirements) are relevant. In one of the most important exaction cases,the U.S.Supreme Court found that a government agency imposing exactions on development must demonstrate an "essential nexus" between the exaction and the interest being protected (see Nollan v. California Coastal Commission, 1987). In a more recent case (Dolan v. City of Tigard, OR, 1994),the Court ruled that an exaction also must be "roughly proportional" to the burden created by development. However, the Dolan decision appeared to set a higher standard of review for mandatory dedications of land than for monetary exactions such as impact fees. REQUIRED I I There are three reasonable relationship requirements for impact fees that are closely related to "rational nexus" or"reasonable relationship" requirements enunciated by a number of state courts. Although the 5 57 OCS Schools Impact Fee Report(DRAFT) term"dual rational nexus" is often used to characterize the standard by which courts evaluate the validity of impact fees under the U.S. Constitution, we prefer a more rigorous formulation that recognizes three elements: "impact or need," "benefit," and "proportionality." The dual rational nexus test explicitly addresses only the first two, although proportionality is reasonably implied, and was specifically mentioned by the U.S. Supreme Court in the Dolan case. The reasonable relationship language of the statute is considered less strict than the rational nexus standard used by many courts. Individual elements of the nexus standard are discussed further in the following paragraphs. Demonstrating an Impact.All new development in a community creates additional demands on some, or all, public facilities provided by local government. If the supply of facilities is not increased to satisfy that additional demand,the quality or availability of public services for the entire community will deteriorate. Impact fees may be used to recover the cost of development-related facilities, but only to the extent that the need for facilities is a consequence of development that is subject to the fees. The Nollan decision reinforced the principle that development exactions may be used only to mitigate conditions created by the developments upon which they are imposed.That principle clearly applies to impact fees. In this study, the impact of development on improvement needs is analyzed in terms of quantifiable relationships between various types of development and the demand for specific facilities, based on applicable level- of-service standards. Demonstrating a Bene it. A sufficient benefit relationship requires that fee revenues be segregated from other funds and expended only on the facilities for which the fees were charged. Fees must be expended in a timely manner and the facilities funded by the fees must serve the development paying the fees. Procedures for the earmarking and expenditure of fee revenues are typically mandated by the State enabling act, as are procedures to ensure that the fees are expended expeditiously or refunded. All of these requirements are intended to ensure that developments benefit from the fees they are required to pay.Thus, an adequate showing of benefit must address procedural as well as substantive issues. Demonstrating Proportionality. The requirement that exactions be proportional to the impacts of development was clearly stated by the U.S. Supreme Court in the Dolan case (although the relevance of that decision to impact fees has been debated) and is logically necessary to establish a proper nexus. Proportionality is established through the procedures used to identify development-related facility costs, and in the methods used to calculate impact fees for various types of facilities and categories of development. The demand for facilities is measured in terms of relevant and measurable attributes of development. For example, the need for school improvements is measured by the number of public school-age children generated by development. METHODOLOGIES I Any one of several legitimate methods may be used to calculate impact fees. The choice of a particular method depends primarily on the service characteristics and planning requirements for the facility type being addressed. Each method has advantages and disadvantages in a particular situation, and to some 6 58 OCS Schools Impact Fee Report(DRAFT) extent can be interchangeable, because each allocates facility costs in proportion to the needs created by development. Reduced to its simplest terms, the process of calculating impact fees involves two main steps: (1) determining the cost of development-related capital improvements and (2) allocating those costs equitably to various types of development. In practice,though,the calculation of impact fees can become quite complicated because of the many variables involved in defining the relationship between development and the need for facilities. The following paragraphs discuss three basic methods for calculating impact fees and how those methods can be applied. Plan-Based Fee Calculation.The plan-based method allocates costs for a specified set of improvements to a specified amount of development.The improvements are identified by a facility plan and development is identified by a land use plan. In this method, the total cost of relevant facilities is divided by total demand to calculate a cost per unit of demand. Then, the cost per unit of demand is multiplied by the amount of demand per unit of development (e.g. housing units or square feet of building area) in each category to arrive at a cost per specific unit of development (e.g., single family detached unit). Cost Recovery Fee Calculation. The rationale for the cost recovery approach is that new development is paying for its share of the useful life and remaining capacity of facilities already built or land already purchased from which new growth will benefit. This methodology is often used for systems that were oversized such as sewer and water facilities. To calculate a fee using the cost recovery approach, the facility cost is divided by ultimate number of demand units the facility will serve. Incremental Expansion Fee Calculation. The incremental expansion method documents the current LOS for each type of public facility in both quantitative and qualitative measures, based on an existing service standard (such as square feet per student).The LOS standards are determined in a manner similar to the current replacement cost approach used by property insurance companies. However, in contrast to insurance practices, the fee revenues would not be for renewal and/or replacement of existing facilities. Rather, revenue will be used to expand or provide additional facilities, as needed, to accommodate new development. An incremental expansion cost method is best suited for public facilities that will be expanded in regular increments,with LOS standards based on current conditions in the community. Credits. Regardless of the methodology, a consideration of"credits" is integral to the development of a legally valid impact fee methodology. There are two types of "credits" each with specific, distinct characteristics, but both of which should be addressed in the development of impact fees. The first is a credit due to possible double payment situations. This could occur when contributions are made by the property owner toward the capital costs of the public facility covered by the impact fee.This type of credit is integrated into the impact fee calculation. The second is a credit toward the payment of a fee for dedication of public sites or improvements provided by the developer and for which the impact fee is imposed. This type of credit is addressed in the administration and implementation of an impact fee program. 7 59 OCS Schools Impact Fee Report(DRAFT) Orange County • • • . Overview The County has seen significant residential growth over the past several years and with it increased enrollment. Growth is expected to continue in the future. Appendix A provides detail on land use and demographic assumptions and projections. To ensure that OCS have adequate capacity to accommodate growth,Orange County is considering implementation of updated impact fees for schools.The County has been granted authority by the State to implement impact fees for schools.'The purpose of the legislation is to"help defray the costs to the County of constructing certain capital improvements,the need for which is created in substantial part by the new development that takes place within the County."' Orange County is served by two school systems, OCS and CHCCS. TischlerBise analyzed and calculated school impact fees for each school system. This report details the results of the OCS impact fees. The report on the other school system is issued under separate cover. The reports comply with relevant requirements for calculation of impact fees. OCS impact fees are derived using the incremental approach. This approach determines current LOS standards for school buildings (elementary, middle,and high), portable classrooms, support facilities, and buses. Land for school sites is not a component of the fee,since the draft 2016 Orange County, NCSchools Adequate Public Facilities Ordinance Annual Report indicates "renovation and expansion to existing facilities may delay construction of new schools further into the future."'Therefore, new land acquisition is not required at this time. LOS standards are derived using the adopted standards per the County's Schools Adequate Public Facility Ordinance (SAPFO) and are expressed as follows: • School buildings: Square feet per student by type of school, • Portable classrooms: Classrooms per student by type of school; • Support facilities: Square feet per student; and • Buses/other vehicles: Number of vehicles per student A credit is included in the impact fee to account for outstanding debt on OCS improvements. Further detail on the approach, LOS, costs, and credits is provided in the body of this report. 4 S.L.1987-460("An Act Making Sundry Amendments Concerning Local Governments In Orange And Chatham Counties,Title VI: Orange County Impact Fees"). In addition to schools, other community service facility categories are allowed such as: the acquisition of land for open space and greenways,capital improvements to public streets,bridges,sidewalks,bikeways,on-and off-street surface water drainage ditches,pipes,culverts,other drainage facilities,water and sewer facilities and public recreation facilities.(See Appendix B for a copy of the applicable section of the Act.) 5 Ibid,Sec.17(b)(1). 6 SAPFOTAC,2016 Orange County,NC Schools Adequate Public Facilities Ordinance(draft),p.iii. 8 60 OCS Schools Impact Fee Report(DRAFT) Student • Demand for additional school capacity will come from new residential development. To determine the level of this demand, student generation rates are used.The term "student generation rate" refers to the number of public school students per housing unit in the OCS system.'Public school students are a subset of school-aged children,which includes students in private schools and home-schooled children. Student generation rates are important demographic factors that help account for variations in demand for school facilities by type of housing. Students per housing unit are held constant over the projection period since the impact fees represent a "snapshot approach" of current LOS and costs. TischlerBise obtained student generation data for each school system in the county from Orange County. The student generation rates were calculated using 2013-2014 student address data geocoded to Orange County land records tracking housing unit types. These data were analyzed for units built during two different time periods: prior to 2004, and from 2004 through 2013. Data were collated for these two discrete periods in order to evaluate whether new development patterns and demand trends in the residential market had impacted student generation rates for recently built units. Student generation rates for units constructed from 2004 to 2013 were drawn from an earlier TischlerBise study, finished in May 2015. In some cases, data from these two periods are combined due to availability limitations, as detailed in Appendix A. Rates are provided for each of the five housing unit types used in the impact fee analysis for each level of school facility: (1) Elementary; (2) Middle; and (3) High. For single family detached homes, separate rates are included for 0-3 bedroom and 4+ bedroom units. For single family attached and multifamily units, separate rates are provided for 0-2 bedroom and 3+ bedroom units. Rates for single family detached (less than 800 square feet) units and manufactured homes are not segmented by bedroom count given the smaller square footage of these types of units.Student generation rates for OCS are shown below in Figure 2. 'Student generation rates are calculated separately for each school system in the County.(See Appendix A for more detail.) 9 61 OCS Schools Impact Fee Report(DRAFT) Figure 2. Student Generation Rates: OCS Type of Unit Single Family Detached 0-3 Bedrooms 0.166 0.088 0.125 0.379 4+Bedrooms 0.126 0.069 0.087 0.283 Total 0.152 0.081 0.112 0.346 Single Family Detached(<800 Sq.Ft.) 0.066 0.020 0.023 0.108 Single Family Attached 0-2 Bedrooms 0.059 0.029 0.029 0.118 3+Bedrooms 0.065 0.047 0.060 0.172 Total 0.064 0.045 0.056 0.165 Multifamily 0-2 Bedrooms 0.033 0.017 0.033 0.083 3+Bedrooms 0.383 0.128 0.162 0.673 Total 0.088 0.035 0.053 0.176 Manufactured 0.136 0.057 0.068 0.262 As shown above, a 0-3 bedroom single family detached unit is estimated to generate a total of 0.379 students (with 0.166 in elementary grades, 0.088 in middle school grades, and 0.125 in high school grades), a 4+bedroom single family detached unit is estimated to generate a total of 0.283 students, and a single family detached unit with less than 800 square feet generates a total of 0.108. For single family attached, a 0-2 bedroom unit is estimated to generate a total of 0.118 students and a 3+ bedroom unit is estimated to generate a total of 0.172; for multifamily units, a 0-2 bedroom unit is estimated to generate a total of 0.083 students and 3+bedroom unit is estimated to generate 0.673; and a manufactured home is estimated to generate a total of 0.262 students per unit. Additionally, TischlerBise calculated a generation rate for age-restricted units (those units in developments that restrict the number of units with occupants aged under 55 years old) based on data provided by Epcon Communities.This type of community is relatively new to the development landscape in the Raleigh-Durham-Chapel Hill region. Figure 3 shows available data,which yields a student generation rate of 0.019. As these developments reach maturity and other age-restricted communities come to market, TischlerBise recommends updating the student generation rate calculation for age-restricted units. Figure 3. Age-Restricted Unit Generation Rates Development d of Household ISchool Age Children Courtyards at Culp Arbor Durham,NC 69 2 0 Courtyards at Cary Cary,NC 15 0 0 Courtyards at Okelly-Chapel Cary,NC 22 2 0 Villas at Maple Creek Westerville,OH 52 2 3 158 6 3 Source:Epcon Communities 10 62 OCS Schools Impact Fee Report(DRAFT) Impact Orange County Schools METHODOLOGY The OCS impact fee methodology is based on current average public school student generation rates, LOS standards, and local costs. Figure 4 illustrates the methodology used to calculate the fee. The school impact fees use an incremental expansion approach,which documents the current LOS for public facilities in both quantitative and qualitative measures. The intent is to use impact fee revenue to expand or provide additional facilities, as needed to accommodate new development, based on the current LOS and cost to provide capital improvements.All school levels are included in the fees. Costs for school buildings, portable classrooms, support facilities, and buses/vehicles are included in the fee.The costs are adjusted to account for estimated State funding for capacity projects;therefore,the fees reflect the County's share of the total costs. Finally, a credit for future principal payments on existing debt is included. Figure 4. Impact Fee Methodology Chart: OCS �i11�gi�l Ii1 u�up�u�IIlIlIil 1101���1 u�fi11 I�IU1uu IIIIIIIIIIIIIIIII I-IIIIIIIIIIIIII III �mi�illiirrrriiifldufld6� �� IIII i« If i`� `w" ' �� I IIII II I II II I III I IIIIIII 11 I@ I'I IIIIIIIII III VIII � IIIIIIIII III III � I 11 63 OCS Schools Impact Fee Report(DRAFT) BUILDING LEVEL OF SERVICE This section provides current inventories of elementary, middle, and high schools in the OCS system.The data contained in these tables are used to determine infrastructure standards for school buildings and sites on which the impact fees are based. The draft 2016 Orange County, NC Schools Adequate Public Facility Ordinance Annual Report provides current adopted LOS by school type that are used for the impact fee study. LOS means the amount of students that can be accommodated at a certain school system level. Figure 5 provides the adopted LOS standards. Figure S. LOS Standards: OCS LEVEL OF •D Elementary(K-5) 105% Middle(6-8) 107% High(9-12) 110% Source:Orange County,NC,Schools Adequate Public Facilities Ordinance Annual Report 2016(Draft) C 005 Flmmeni°nry School The inventory and current LOS for OCS elementary schools are shown below in Figure 6. As indicated below, elementary school buildings have a total of 530,612 square feet of floor area and six portable classrooms. Total enrollment in all elementary schools is 3,318. LOS factors for OCS elementary schools are also shown in Figure 6. The adopted LOS standards (based on 105 percent capacity) for school buildings and portables are shown highlighted in the figure below. As shown, the LOS factors on which the impact fees are based are 136.80 square feet and 0.0015 portable classrooms per student. It should be noted that the capacity figures reflect mandated reduced class size for Grades K-3 from 1:23 to 1:21, reflecting actual current LOS and the standards by which new schools will be planned and built. Figure 6. OCS Elementary Schools SCHOOLS ELEMENTARY Inventory,Enrollment,and Levels of Service Building SYIS-16 Facility Square Feet Membership Ill Cameron Park Elementary 70,812 2 609 S6S 108% Central Elementary 61,382 0 319 4SS 70% Efland Cheeks Elementary 65,084 0 428 497 86% Grady Brown Elementary 75,016 1 486 S44 89% Hillsborough Elementary 72,872 0 466 471 99% New Hope Elementary 100,164 2 621 S86 106% Pathways Elementary 85,282 1 389 S76 68% Elementary School Levels of Service Demand Units(Students) Building SF Portables LOS per Student based on Current Enrollment 3,318 159.92 0.0018 LOS per Student based on Capacity 3,694 143.64 0.0016 [11 SAPFO Capture Date Membership,Nov.13,2015 Source:Orange County,OCS 12 64 OCS Schools Impact Fee Report(DRAFT) C 005 A4iddle Schools The inventory and current LOS for OCS middle schools are shown below in Figure 7. As indicated below, middle school buildings have a total of 390,933 square feet of floor area. There are no portable classrooms.Total enrollment in all middle schools is 1,739. LOS factors for OCS middle schools are shown in Figure 7.The adopted LOS standards(based on 107 percent capacity)for school buildings and portables are shown highlighted in the figure below. As shown, the LOS factors on which the impact fees are based are 168.68 square feet and 0.000 portable classrooms per student. Figure 7. OCS Middle Schools MIDDLE .. Inventory,Enrollment,and Utilization Building SY15-16 Capacity Level of juare Feet Membership[11 Service A.L.Stanback Middle 136,000 0 635 740 86% C.W.Stanford Middle 132,140 0 654 726 90% Gravelly Hill Middle 122,793 0 450 700 64% Middle School Levels of Service Demand Units(Students) Building SF Portables LOS per Student based on Current Enrollment 1,739 224.80 0.000 LOS per Student based on Capacity 2,166 180.49 0.000 • . ... -. • 1 / l o t [11 SAPFO Capture Date Membership,Nov.13,2015 Source:Orange County,OCS 4C4 High Schools The inventory and current LOS for OCS high schools are shown below in Figure 8.As indicated below, high school buildings have a total of 430,703 square feet of floor area.There are no portable classrooms.Total enrollment in all high schools is 2,469. LOS factors for OCS high schools are shown in Figure 8.The adopted LOS standards (based on 110 percent capacity) for school buildings and portables are shown highlighted in the figure below. As shown, the LOS factors on which the impact fees are based are 160.54 square feet and 0.000 portable classrooms per student. Figure 8. OCS High Schools SCHOOLS HIGH Inventory,Enrollment,and Utilization Building Portables SYIS-16[1] Capacity Levelof Facility Square Feet Classrooms Membership Service Orange High 217,203 1 0 1,298 1,399 93% Cedar Ridge High 206,900 1 0 1,140 1,000 114% Partnership Academy 6,600 1 0 31 40 78% High School Levels of Service Demand Units(Students) Building SF Portables LOS per Student based on Current Enrollment 2,469 174.44 0.000 LOS per Student based on Capacity 2,439 176.59 0.000 • . . ... -. • 1 .1 / 111 [11 SAPFO Capture Date Membership,Nov.13,2015 Source:Orange County,OCS 13 65 OCS Schools Impact Fee Report(DRAFT) SCHOOL CONSTRUCTION TischlerBise analyzed costs for school construction in the OCS system. Costs for completed and planned school projects in OCS were provided by the Orange County Finance Office and OCS.TischlerBise adjusted previous costs to current (2016 Q1) dollars, where appropriate, using the Turner Building Index, a well- known and widely available construction price index. Current school costs represent the average costs to construct elementary, middle, and high schools in the OCS System. As shown in Figure 9, construction costs average between$202 and $252 per square foot. Specifically,the costs are as follows—elementary: $202 per square foot; middle: $223 per square foot; and high: $219 per square foot. Figure 9. School Project Costs School Year Cost Index Factor I Adjusted Cost[11 Square Feet CostperSF Capacity Elementary School Prototype(per seat)[2] - $27,678 - $27,678 136.80 $202 1 ,$27,678 Gravelly Hill Middle 2006 $22,369,811 122% $27,362,821 122,793 $223 700 $39,090 Cedar Ridge High 2003 $27,987,060 156% $43,715,698 206,900 $211 1,000 $43,716 Planned Cedar Ridge High Addition[3] 2017 $12,583,000 N/A $12,583,000 50,000 $252 Soo $25,166 High Subtotal $56,298,698 256,900 $219 1,500 $37,532 $62,967,549 $83,689,196 379,830 $220 2,201 1 $38,023 111 Adjusted using the Turner Building Cost Index,2016 First Quarter Forecast 121 Derived as a percentage of the CHCCS cost persq.ft.for elementary schools.TischlerBise defined a)the relationship between OCS and CHCCS of the average cost persq.ft.for all recent school projects and b)the relationship between CHCCS's elementary school and its middle and high schools.These two percentages are then multiplied by CHCCS's cost persq.ft.for middle schools to derive the OCS cost. 131 The cost estimate for this project is in 2015 dollars and was not index-adjusted.Adjusted cost subtotals and totals include this unadjusted cost. PORTABLE L Orange County currently uses portable classrooms for additional classroom capacity with a total of 6 classrooms in use currently.The cost for each portable classroom is$78,000, per Orange County staff. SUPPORT FACILITIES The impact fees also include costs to provide support facilities such as administrative office space, maintenance facilities,and bus garages. For OCS,support facilities include Board of Education office space and the Maintenance Shop.The joint-use Transportation Facility serves both school systems in the county and, therefore, costs are allocated to current enrollment in both districts (see Appendix A). Costs were confirmed with OCS staff.The following two figures reflect current LOS and cost factors for these facilities. Figure 10. Support Facilities–OCS Square cost Bldg Facility Feet Per Sq Ft cost Board of Education(OCS) 6,210 $200 $1,242,000 Maintenance Shop(OCS) 17,559 $200 $3,511,800 Current Total OCS Enrollment 7,526 Building LOS(sq.ft.per student) 3.16 Building Cost per Student $631.65 Source:Orange County Schools 14 66 OCS Schools Impact Fee Report(DRAFT) Figure 11. Support Facilities—Serving OCS and CHCCS are Cost et Per Sq Ft Transportation Facility* 11,704 $200 $2,340,800 e e Current Total CHCCS and OCS Enrollment 19,572 LOS(sq.ft.per student) 0.5980 Cost per Student $119.60 *Serves both OCS and CHCCS Districts Source:Orange County Schools BUS/VEHICLES Another infrastructure component included in the impact fee is buses and vehicles. New buses and vehicles will need to be purchased to accommodate increased enrollment.Total current value of the fleet is estimated at approximately$8.8 million, which equates to a current cost of almost$1,200 per student. LOS and costs are provided below in Figure 12 for the OCS fleet. Figure 12. Buses/Vehicles LOS and Costs: OCS Total Type Number of units CostlBus OCS Buses 79 $83,690 $6,611,510 OCS Activity Buses 15 $84,144 $1,262,160 Other Vehicles 30 $30,000 $900,000 Source:OCS Current Total OCS Enrollment 7,526 Buses/Vehicles per Student 0.016 Cost per Student $1,165.78 ADJUSTMENT NON-LOCAL FUNDING To adequately reflect the local share of capacity costs,the impact fees need to be adjusted to account for State funding for capacity improvements. Orange County estimates that the County receives one percent of the costs for capacity improvements from the state. Therefore the local share is adjusted to represent 99 percent of the total. (Other contributions from the State are used for maintenance and other non- capacity related improvements.) CREDIT I I L PAYMENTS ON SCHOOL I Because the County debt-financed a portion of recent school capacity expansion construction costs, a credit is included for future principal payments on outstanding debt. A credit is necessary since new residential units that will pay the impact fee will also contribute to future principal payments on this remaining debt through property taxes. A credit is not necessary for interest payments because interest costs are not included in the costs. 15 67 OCS Schools Impact Fee Report(DRAFT) Information on outstanding debt for OCS was provided by Orange County Finance Department staff. School improvements and applicable bond issues are indicated in Figure 13 below. As shown, total outstanding debt from school capacity expansion projects for OCS is estimated at approximately $21 million. Annual principal payments are divided by student enrollment in each year to get a per student credit. (For example, in FY 2018,the total amount of projected principal to be paid of$2,182,155 is divided by enrollment of 7,610 for a payment per student of$287.)To account for the time value of money,annual payments per student are discounted using a net present value formula based on an average current interest rate of 2.55 percent. The total net present value of future principal payments per student is $2,429.24.This amount is subtracted from the gross capital cost per student amount to derive a net capital cost per student for school facilities. Figure 13. Credit for Future Principal Payments: OCS 2010 Projected 2011 Projected 2012 Projected 2015 Projected Total Payment Fiscal Year (1) (2) �s� I4� Total Per Principal Principal Principal Principal Students Student 2016 $667,145 $310,276 $420,569 $989,831 $2,387,821 7,560 $316 2017 $660,406 $304,394 $412,115 $957,458 $2,334,373 7,597 $307 2018 $665,460 $624,964 $0 $891,731 $2,182,155 7,610 $287 2019 $1,034,411 $908,771 $653,044 $131,454 $2,727,680 7,654 $356 2020 $1,031,042 $901,419 $1,020,777 $0 $2,953,237 7,678 $385 2021 $1,025,988 $1,626,377 $0 $0 $2,652,365 7,708 $344 2022 $587,963 $1,980,768 $0 $0 $2,568,732 7,778 $330 2023 $0 $446,506 $1,642,120 $0 $2,088,626 7,807 $268 2024 $0 $0 $1,082,066 $0 $1,082,066 7,817 $138 Total $5,672,414 $7,103,476 $5,230,690 $2,970,475 $20,977,055 $2,731 Discount Rate[6] 2.55% Net Present Value $2,429.24 (1)Cedar Ridge HS,Gravelly Hill MS,Hillsborough Elem(issued in March 2010)-Refunding 2010 (2)Gravelly Hill MS(issued in November 2011)-Refunding 2011 (3)Gravelly Hill MS(issued in December 2012)-Refunding 2012 (4)Cedar Ridge HS,Pathways Elem(issued in April 2015)-Refunding 2015 (5)See Appendix for enrollment projections (6)To account for the time value money,total payment per student is discounted using a net present value formula assuming the average interest rate from outstanding debt as shown. SCHOOL IMPACT INPUT VARIABLES Factors used to derive the OCS impact fee are summarized in Figure 14. Impact fees for schools are based on student generation rates (i.e., public school students per housing unit) and are only implemented on residential development. LOS standards are based on current costs per student for school buildings, portable classrooms, support facilities, and buses/vehicles as described in the previous sections and summarized below. Also included in the fee is the cost for preparation of the impact fee study. The consultant study cost per student is calculated based on the projected increase in student enrollment (based on SAPFO projections; see Appendix A) in CHCCS and OCS over the next three years and is added to the capital cost per student to derive the total cost per student. Three years reflect the typical length of time before the impact fees should be reexamined to reflect changes in development and levels of service. 16 68 OCS Schools Impact Fee Report(DRAFT) The total gross capital cost per student is the sum of the boxed cost components. For example, for the elementary school portion, the calculation is as follows: $27,687.24 [building construction] + $120.66 [portable]+$751.25[support facilities]+$1,165.78[buses]+$134.92[consultant cost]=$29,850.85 total gross cost per student. This cost is then adjusted to reflect the local share of the cost at 99 percent, or$29,552.34 per student. The credit for future principal payments ($2,429.24) is then subtracted from the gross local capital cost per student to derive the net local capital cost per student($27,123.09)for elementary schools.The same approach is followed for middle and high schools. Figure 14. Schools Impact Fee Input Variables: OCS Current Level of Service Standards Elementary Middle High Square Feet per Student 136.80 168.68 160.54 Cost per Sq.Ft. $202 $223 $219 Total Building Construction Cost per Studentl $27,678.24 1 $37,587.84 1 $35,180.96 Portable Classrooms per Student 0.0015 0.0000 0.0000 Cost per Portable Classroom $78,000 $78,000 $78,000 Portable Classroom Cost per Studentl $120.66 $0.00 OCS Support Facilities per Student(Sq.Ft.) 3.16 3.16 3.16 Cost per Sq.Ft. $200 $200 $200 OCS/CHCCS Transp.Facility per Student(Sq.Ft.) 0.60 0.60 0.60 Cost per Sq.Ft. $200 $200 $200 Support Facility Cost per Studentl $751.25 $751.25 1 $751.25 Buses/Vehicles per Student 0.01648 0.01648 0.01648 Weighted Average Cost per Bus/Vehicle $70,755 $70,755 $70,755 Bus/Vehicle Cost per Student 1 $1,165.78 $1,165.78 1 $1,165.78 Consultant Study Cost per Studentl $134.92 1 $134.92 1 $134.92 Total Gross Cost Per Studentl $29,850.85 1 $39,639.79 1$37,232.91 Local Share of Capacity Cost 99% 99% 99% Total Gross Local Capital Cost per Studentl $29,552.34 $39,243.39 $36,860.58 Principal Payment Credit per Student ($2,429.24) ($2,429.24) ($2,429.24) Total Net Local Capital Cost per Student $27,123.09 $36,814.15 $34,431.34 Average Capital Cost per Student(all levels) $32,789.53 MAXIMUM L IMPACT FEES FOR ORANGE COUNTY SCHOOLS Figure 15 shows the schedule of maximum supportable impact fees for OCS. The fees are calculated by multiplying the student generation rate for each housing type (shown at the top of Figure 15) by the net capital cost per student for each type of school. Each component is then added together to derive the total public school impact fee. For example, for a 0-3 bedroom single family detached unit, the elementary school portion of the fee is calculated by multiplying the student generation rate of 0.166 by the net local capital cost per elementary student of$27,123.09, which results in a fee of$4,502 (truncated). This is repeated for the other school levels. The three portions of the fee are added together to calculate the total fee by type of residential 17 69 OCS Schools Impact Fee Report(DRAFT) unit(i.e.,for 0-3 bedroom single family detached:$4,502+$3,239+$4,303=$12,044.)$For age-restricted units, the student generation rate of 0.019 is multiplied by the average total net local capital cost per student for all school levels ($32,789.53), since the school level of generated pupils was not available in the Epcon Communities data.This results in a fee of$623 per unit. Figure 15. Maximum Supportable Schools Impact Fees: OCS INPUT VARIABLES:Orange County Schools School Level Public School Students per Housing Unit Elementary Middle High Total Single Family Detached 0-3 Bedrooms 0.125 0.379 4+Bedrooms .069 0.087 0.283 Average .081 0.112 0.346 Single Family Detached(<800 Sq.Ft.) .020 0.023 0.108 Single Family Attached 0-2 Bedrooms 0.059 0.029 0.029 0.118 3+Bedrooms 0.065 0.047 0.060 0.172 Average 0.064 0.045 0.056 0.165 Multifamily 0-2 Bedrooms 0.033 0.017 0.033 0.083 3+Bedrooms 0.383 0.128 0.162 0.673 Average 0.088 0.035 0.053 0.176 Manufactured Unit 0.136 0.057 0.068 0.262 Age-Restricted Unit 0.019 Cost Factors Total Net Local Capital Cost per Studentl$27,123.09 1$36,814.151$34,431.34 Average Capital Cost per Student(all levels) 1$32,789.53 MAXIMUM ALLOWABLE SCHOOL IMPACT FEES:Orange County Schools Impact Fee per Housing Unit Elementary Middle High TOTAL Single Family Detached 0-3 Bedrooms $4,502 1 $3,239 1 $4,303 1 $12,044 4+Bedrooms $3,417 $2,540 $2,995 $8,952 Single Family Detached Average $4,122 $2,981 $3,856 $10,959 Single Family Detached(<800 Sq.Ft.) 1 $1,790 $736 $791 $3,317 Single Family Attached 0-2 Bedrooms $1,600 $1,067 $998 $3,665 3+Bedrooms $1,763 $1,730 $2,065 $5,558 Single Family Attached Average $1,735 $1,656 $1,928 $5,319 Multifamily 0-2 Bedrooms $895 $625 $1,136 $2,656 3+Bedrooms $10,388 1 $4,712 $5,577 $20,677 Multifamily Average $2,386 1 $1,288 $1,824 $5,498 Manufactured Unit 1 $3,688 1 $2,098 $2,341 $8,127 Age-Restricted Unit $623 $Because the analysis uses figures carried to their ultimate decimal places,the sums and products shown may not equal the sum or product if the reader replicates the calculation with the factors shown in the report. 18 70 OCS Schools Impact Fee Report(DRAFT) Cash Flow Projections This section summarizes the potential cash flow to Orange County if impact fees are implemented for OCS at the maximum supportable amounts as detailed in this report. Figure 16 provides a summary of the projected cash flow from the impact fees and associated capital costs over a five-year period. School impact fee revenue averages approximately$3.5 million per year over the first five years,or almost $17.7 million, if the fees are implemented at the maximum supportable level. The related school local capital costs average approximately $3.8 million per year, or $19 million over five years. Based on the projected impact fee revenues and associated costs, the fees are projected to cover approximately 93 percent of the projected related capital costs. Funds can be accumulated for several years in order to construct a major project. Since the school impact fee includes a credit for existing debt, an overall deficit for schools is projected. The projected deficit, indicated by "( )" around the numbers, will require supplemental revenue of approximately $278,000 per year. To the extent the rate of development either accelerates or slows down, there will be a corresponding change in the fee revenue and related capital costs. See Appendix A of this report for discussion of the development projections that drive the cash flow analysis. Figure 16. Cash Flow Projections: OCS 5-Year 5-Year 10-Year 1 2 3 4 5 Average Cumulative Average Cumulative 2016 2017 2018 2019 2020 Annual Total Annual Total • ENEEMSEENEEM SCHOOLS 1 Single Family Detached $2,617 $2,617 $2,617 $2,617 $2,617 $2,617 $13,085 $2,617.01 $26,170 2 Single Family Attached $318 $318 $318 $318 $318 $318 $1,588 $318 $3,175 3 Multifamily $438 $438 $438 $438 $438 $438 $2,188 $438 $4,376 4 Manufactured $162 $162 $162 $162 $162 $162 $809 $162 $1,617 Subtotal Schools Fees $3,534 $3,534 $3,534 $3,534 $3,534 $3,534 $17,670 $3,534 $35,339 TOTAL FEE REVENUE $3,534 $3,534 $3,534 $3,534 $3,534 $3,534 $17,670 $3,534 $35,339 ® b ® m o SCHOOLS Schools-Elementary $1,474 $1,474 $1,474 $1,474 $1,474 $1,474 $7,371 $1,474 $14,743 Schools-Middle $1,020 $1,020 $1,020 $1,020 $1,020 $1,020 $5,102 $1,020 $10,203 Schools-High $1,317 $1,317 $1,317 $1,317 $1,317 $1,317 $6,586 $1,317 $13,172 Subtotal Schools Costs $3,812 $3,812 $3,812 $3,812 $3,812 $3,812 $19,059 $3,812 $38,119 TOTAL CAPITAL COSTS $3,812 $3,812 $3,812 $3,812 $3,812 $3,812 $19,059 $3,812 $38,119 NET CAPITAL FACILITIES CASH FLOW Schools Current$in thousands Annual Surplus(ter Deficit) ($278) ($278) ($278) ($278) ($278) ($278) ($278) Cumulative Surplus(or Deficit) ($278) ($556) ($834) ($1,112) ($1,390) ($1,390) ($2,779) 19 71 OCS Schools Impact Fee Report(DRAFT) Implementation and Administration ACCOUNTING Impact fees should be paid at time of building permit. Certain accounting procedures should be followed by the County. For example, monies received should be placed in a separate fund and accounted for separately and may only be used for the purposes authorized in the impact fee ordinance. Interest earned on monies in the separate fund should be credited to the fund. COST UPDATES All costs in the impact fee calculations are given in current dollars with no assumed inflation over time. Necessary cost adjustments can be made as part of the recommended annual evaluation and update of the fees. One approach is to adjust for inflation in construction costs by means of an index specific to construction as opposed to the consumer price index (CPI), which is more general in nature. TischlerBise recommends using the Marshall Swift Valuation Service, which provides comparative cost multipliers for various geographies and types of construction. The multipliers can be applied against the calculated impact fee. If cost estimates or other factors change significantly the County should redo the fee calculations. A full update is recommended every 3 to 5 years to reflect changes in development trends, infrastructure capacities, costs, funding formulas, etc. CREDITS I Future Revenue Credits OCS impact fees are calculated using an incremental approach. This method documents current factors and is best suited for public facilities that will be expanded incrementally in the future. Because new development will provide front-end funding of infrastructure, there is a potential for double payment of capital costs due to future principal payments on existing debt for public facilities.A credit is not necessary for interest payments because interest costs are not included in the fees. This type of credit is incorporated into the County schools impact fees due to outstanding debt on OCS school capacity expansions and land acquisition. Site-Sped is Credits A site-specific credit should be considered for contributions of system improvements that have been included in the impact fee calculations. If a developer constructs the type of system improvements included in the fee calculations, it will be necessary to either reimburse the developer or provide a credit against the fees for that portion of the fee. The latter option is more difficult to administer because it creates unique fees for specific geographic areas. Based on TischlerBise's experience, it is better for the County to establish a reimbursement agreement with the developer constructing the system improvement.The reimbursement agreement should be limited to a payback period of no more than ten 20 72 OCS Schools Impact Fee Report(DRAFT) years and the County should not pay interest on the outstanding balance. The developer must provide sufficient documentation of the actual cost incurred for the system improvement.The County should only agree to pay the lesser of the actual construction cost or the estimated cost used in the impact fee analysis. If the County pays more than the cost used in the fee analysis, there will be insufficient fee revenue. Reimbursement agreements should only obligate the County to reimburse developers annually according to actual fee collections from the benefiting area. COLLECTION I The reasonableness of impact fees is determined in part by their relationship to the local government's burden to provide necessary public facilities. The need to show a substantial benefit usually requires communities to evaluate collection and expenditure zones for public facilities that have distinct geographic service areas. TischlerBise analyzed school impact fees in the County separately for each school system that serves residential development in Orange County—OCS and CHCCS. The end result is two separate fee studies with two impact fee schedules. For the County School system, one area is appropriate because capacity improvements are needed at all levels throughout the County system and County schools will occasionally re-district to accommodate growth and available capacity. IMPACT The Act providing Orange County with the authority to collect school impact fees is provided in Appendix B. 21 73 OCS Schools Impact Fee Report(DRAFT) Appendix A: Demographic Data OVERVIEW As part of our Work Scope, TischlerBise has prepared documentation on demographic data and development projections used in the Schools Impact Fee Studies. Two studies have been conducted for Orange County: (1)OCS and (2)CHCCS.This Appendix covers both school systems in the County,while the body of the report reflects CHCCS only. (The OCS report is issued under separate cover.)The demographic data estimates for the school year 2006-2007 are used in the fee calculations. Impact fees can be defined as new growth's fair share of the cost to provide necessary capital facilities. Fee revenue must be used for capacity expansions and cannot be used for operations or maintenance costs. In determining the reasonableness of these one-time fees, the fee must meet three requirements: (1) Impact / Need: The needed capital facilities are a consequence of new development; (2) Proportionality: Fees represent a proportionate share of the cost;and(3) Benefit: Revenues are managed and expended in such a way that new development receives a substantial benefit.The demographic data and analysis provided in this section provide the foundation to meet the first two requirements listed above. The development projections are used to establish a need for future infrastructure due to growth as well as to have an understanding of the possible future pace of service demands, revenues from impact fees, and projected capital expenditures.To the extent development slows or accelerates,there will be virtually no effect on the fee amount. Please note that calculations throughout are based on an analysis that was conducted using Excel software. Results are discussed using whole numbers or one- to three-digit places, which represent rounded figures. However, the analysis itself uses figures carried to their ultimate decimal places; therefore the sums and products generated in the analysis may not equal the sum or product if the reader replicates the calculation with the factors shown in the report(due to the rounding of figures shown, not in the analysis). POPULATION I To provide context for public school student enrollment growth in Orange County, the following section provides information on population and housing growth in the county. The total population residing in housing units in the county in 2010, according to the U.S. Census (corrected), was 124,244. In addition, 9,557 persons were estimated to reside in group quarters. When added together, the total estimated county population in 2010 was 133,801 (up from 115,531 in 2000, an increase of 18,270 residents over ten years).The estimated number of housing units in the county in 2010 was 55,597, an increase of 7,891 housing units since 2000. 22 74 OCS Schools Impact Fee Report(DRAFT) Estimated average household size for all types of units is 2.23 persons,which is derived by dividing persons residing in housing units by total number of housing units (124,244 population in households / 55,597 housing units= 2.23 persons per housing unit). Figure Al provides further detail on a comparison of 2000 and 2010 Census data for Orange County. Figure Al. U.S. Census Population and Housing Units 000 2010 Increase/(Decrease) Population in Households 105,585 124,244 18,659 Group Quarters Population 9,946 9,557 (389) Total County Population 115,531 133,801 18,270 Estimated Housing Units 47,706 55,597 7,891 Average Persons per Housing Unit Source:U.S.Census Bureau 2010 Census The U.S. Census Bureau estimates that the July 2014 population in Orange County rose to 140,420. Additionally,TischlerBise obtained total housing unit estimates for May 2014 from Orange County, based on the County's Land Records and May 2014 Addresses GIS shapefile. Figure A2 details May 2014 housing unit counts for Orange County, CHCCS, and OCS. For CHCCS, the housing unit counts reflect units located in Chapel Hill and Carrboro and the portion of Orange County that falls within CHCCS. For OCS, building permit data includes other units in the county and the Town of Hillsborough within the OCS system. Figure A2. 2014 Housing Units Orange SF Detached SF Attached Multifamily Manufactured Total Total Orange County Housing Stock 36,443 2,191 14,621 4,674 57,929 Share by Type 63% 4% 25% 8% 100% Subtotal Housing Stock in CHCCSD 18,778 1,493 13,472 513 34,256 Share by Type 55% 4% 39% 2% 100% Subtotal Housing Stock in OCSD 17,665 698 1,149 4,161 23,673 Share by Type 75% 3% 5% 17% 100% Source:Orange County Land Records/GIS May 2014 Addresses shapefile It is assumed that the group quarters data remained the same from 2010(this figure is not separated from total population in non-decennial census estimates), since this figure is largely driven by University of North Carolina at Chapel Hill dormitory populations. Under that assumption,the total population living in housing units in 2014 was approximately 130,863. 23 75 OCS Schools Impact Fee Report(DRAFT) Orange Coon't°C School Based on household characteristics and discussions with County staff,as well as to ensure proportionality, five housing unit types are recommended for the OCS impact fees: (1) Single Family Detached, (2) Single Family Detached Units Less than 800 Sq. Ft., (3)Single Family Attached (e.g., townhomes), (4) Multifamily (e.g., apartments), and (5) Manufactured Homes. In the previous study, Single Family Attached and Multifamily were grouped into one category. However, they are separated in this update to track with changing development patterns. Impact fees are calculated by type of unit and bedroom count(the latter is further detailed below). As shown, a total of 3,320 new housing units were built from January 1, 2004,to December 31, 2013.The majority of new units are single family detached (almost 69 percent), followed by approximately 17 percent multifamily, and 9 percent single family attached/duplex. The remainder are manufactured homes. The mix of new units by type is used to project future housing unit growth later in this report. Further detail is provided below in Figure A3. Figure A3. Housing Unit Growth 2004-2013: OCS � Net Increase Housing Units 004 2013 2004-2013 SF Detached 13,096 15,390 2,294 69% SF Attached/Duplex 162 451 289 9% Multifamily/Other 1,176 1,746 570 17% Manufactured Home 5,451 5,618 167 5% Total 1 19,885 1 23,205 1 3,320 1 100% Source:Orange County Chapel Hill-Carrboco Ci't°C School (CHCCS)� Based on household characteristics and to ensure proportionality, five housing unit types are recommended for the CHCCS impact fees: (1) Single Family Detached, (2) Single Family Detached Units Less than 800 Sq. Ft., (3) Single Family Attached (e.g., townhomes), (4) Multifamily(e.g., apartments) and (5) Manufactured Homes.CHCCS has a significant number of multifamily units that do not generate a large number of school-age children due to the presence of the University of North Carolina at Chapel Hill. Impact fees are calculated by type of unit and bedroom count (the latter is further detailed below). As shown, a total of 2,730 new housing units were built from January 1, 2004, to December 31, 2013. Units are relatively split between single family detached (38 percent), multifamily(34 percent), and single family detached (28 percent). Nine manufactured units were added during this time, a negligible amount. The mix of new units by type is used to project future housing unit growth later in this report. Further detail is provided below in Figure A4. 24 76 OCS Schools Impact Fee Report(DRAFT) Figure A4. Housing Unit Growth 2004-2013: CHCCS Net Increase Housing Units 2004 SF Detached 14,261 15,304 1,043 38% SF Attached/Duplex 2,243 3,005 762 28% Multifamily/Other 16,052 16,968 916 34% Manufactured Home 1,060 1,069 9 0% Total 33,616 36,346 2,730 100% Source:Orange County ESTIMATED I TischlerBise calculated student generation rates for each school system in Orange County based on data from Orange County.The term "student generation rate" refers to the number of public school students per housing unit in each school system: OCS and CHCCS. Public school students are a subset of school- aged children, which includes students in private schools and home-schooled children. Student generation rates are important demographic factors that help account for variations in demand for school facilities by type of housing. Students per housing unit are held constant over the projection period since the impact fees represent a "snapshot approach" of current levels of service and costs. The student generation rates were calculated using student address data geocoded to Orange County land records tracking housing unit types. These data were analyzed for units built during two different time periods: prior to 2004, and from 2004 through 2013. Data were collated for these two discrete periods in order to evaluate whether new development patterns and demand trends in the residential market had impacted student generation rates for recently built units. Student generation rates for units constructed from 2004 to 2013 were drawn from an earlier TischlerBise study,finished in May 2015. Student generation rates were provided by housing unit type for the categories used in each district.That is,for Orange County, rates are provided for each type of unit: (1)Single Family Detached,(2)Single Family Attached/Multifamily, and (3) Manufactured Homes. For CHCCS, rates are provided for: (1) Single Family Detached, (2)Single Family Attached, (3) Multifamily, and (4) Manufactured Homes. In addition,the rates reflect demand by type of school level—elementary, middle, and high. Initially, TischlerBise and County staff attempted a simple combination of the older and newer student generation and housing unit type data in order to derive student generation rates for housing type categories that are representative of the impact of a housing unit on required school capacity over the entire life of that unit. In order to enhance the specificity of its student generation rates,the County tasked TischlerBise with determining these rates by the size of the unit,measured by bedroom count.To facilitate this process, the County had begun to gather bedroom count attributes for most new units constructed since 2004.Therefore,for the most part, student addresses for new units could be matched to a bedroom count record. 25 77 OCS Schools Impact Fee Report(DRAFT) However, bedroom counts were unavailable for units constructed prior to 2004. To determine these figures for the pre-2004 housing stock, TischlerBise used 2005-2007 American Community Survey (ACS) Public Use Microdata Sample (PUMS) data for Public Use Microdata Area (PUMA) 2900 (which includes Orange County and Chatham County)to determine the estimated mix of units by bedroom count for each housing type category.This sample period was the closest to the 2004 cut-off that was still large enough to yield accurate data.The results of this analysis are displayed below in Figure A5. Figure A5:ACS PUMS Data Bedroom Count by Category Analysis(Unweighted Sample) Bedroom Housing Type 0-3 1,014 66.4% Single Family Detached* 4 401 26.3% 5+ 112 7.3% Total 1,527 100% 0-2 64 55.7% Single Family Attached 3+ 51 44.3% Total 115 100% 0-2 383 88.5% Multifamily 3+ 50 11.5% Total 433 100% 0-2 100 41.2% Manufactured 3+ 143 58.8% Total 243 100% *SF Detached<800 Sq. Ft. was not included because there are no bedroom count subcategories Source:2005-2007 ACS PUMS data for PUMA 2900 However, the same problems were present with data regarding students living in units constructed prior to 2004. As shown in Figure A6 and Figure A7 below, a large number of students generated were from units with unknown bedroom counts. This problem is particularly problematic in the Multifamily and Single Family Attached categories. Figure A6: OCS Student Counts Manu ctured Multifamily Single Family Attached Single Family Detached Total nown -21 Known 3+1 Unknown I Known 0-2 lKnown 3+Unknown I Known 0-2 1 Known 3. Unknown Known c800 Sq.Ft. Known 0-3 1 Known 4 1 Known Unadjusted Elementary 580 136 96 4 3]A147 5 EA3 153 23 1,242 319 44 2,620 Middle 231 77 42 2 1 94 7 669 177 38 1,340 High 253 107 35 1 1 5 123 8 993 235 49 1,813 Total 1,064 320 173 7 4 11 3701 38 2,904 731 1 131 5,773 Figure A7: CHCCS Schools Student Counts Unadjusted Elementary 88 3 719 465 37 19 151 58 112 12 1,308 1,176 348 4,496 Middle 44 2 269 167 16 9 65 26 62 9 701 745 216 2,331 High 42 5 300 228 26 15 75 40 77 3 923 1,078 378 3,190 Total 174 10 1,288 860 79 43 291 124 251 24 2,932 2,999 942 10,017 26 78 OCS Schools Impact Fee Report(DRAFT) After testing various strategies to accurately allocate students in units with unknown bedroom counts, TischlerBise, in consultation with the County, determined there was insufficient data to include the entire housing stock.Therefore,TischlerBise, in consultation with County staff, recommends using local data on recently built units (with bedroom counts) and geocoded students data for Multifamily and Single Family Attached rates. This solution avoids a skewed student-to-units ratio that might have resulted from an inaccurate allocation of students from units with unknown bedroom counts. For Single Family Detached, Single Family Detached <800 Sq. Ft., and Manufactured Homes, students in units with unknown bedroom counts reflect less than 10 percent of the total. Therefore, pre-2004 and 2004-2013 data were combined to derive the student generation rates. For Single Family Detached, students from unknown units were allocated based upon the breakdown of students generated from units with known bedroom counts, as shown in Figure A8 and Figure A9. For instance, for OCS, a portion of the 153 elementary-level students in unknown bedroom count single family detached units (see Figure A7) are placed in the 0-3 bedroom category by calculating percentage of known students in the category out of all the known students living in single family detached homes (77.1 percent, or 2,904 / [2,904 + 731 + 131]). Therefore, 118 students (77.1% x 153) are added to the known 0-3 bedroom category(1,242 students)to yield a combined known and unknown student count of 1,360 elementary students. Figure A8: OCS Single Family Detached Units—Unknown Bedroom Count Student Allocation Detached Single Family Unknown Known 0-3 1 Known 4 1 Known 5+ Unadjusted Elementary 153 1,242 319 44 Middle 94 669 177 38 High 123 993 235 49 Total 370 2,904 731 131 77.1% 19.4% 3.5% Adjusted Known+Unknown Elementary 1,360 349 49 Middle 741 195 41 High 1,088 259 53 Total 3,189 803 144 27 79 OCS Schools Impact Fee Report(DRAFT) Figure A9: CHCCS Single Family Detached Units—Unknown Bedroom Count Student Allocation Detached Single Family Unknown Known 0-3 Known 4 Known 5+, Unadjusted Elementary 112 1,308 1,176 348 Middle 62 701 745 216 High 77 923 1,078 378 Total 251 2,932 2,999 942 42.5% 43.5% 13.7% Adjusted Known+Unknown Elementary 1,356 1,225 363 Middle 727 772 224 High 956 1,111 389 Total 3,039 3,108 976 GENERATION STUDENT The 2013-2014 student generation rates for OCS and CHCCS are shown below in Figures A10 and A11, respectively. Rates are provided for each of the five housing unit types used in the impact fee analysis for each level of school facility: (1) Elementary; (2) Middle; and (3) High. For Single Family Detached homes, separate rates are included for 0-2 bedroom, 3 bedroom, and 4+ bedroom units. For Single Family Attached and Multifamily units,separate rates are provided for 0-2 bedroom and 3+bedroom units. Rates for Single Family Detached <800 Sq. Ft. Units and Manufactured homes are not segmented by bedroom count given the smaller square footage of these types of units. Additionally, student generation rates are adjusted for the presence of age-restricted developments, as noted in the figure footnotes.A separate rate schedule for age-restricted developments is currently under consideration. 28 80 OCS Schools Impact Fee Report(DRAFT) Appendix Impact Orange County has been granted authority by the State of North Carolina to implement impact fees for schools, the acquisition of land for open space and greenways, capital improvements to public streets, bridges, sidewalks, bikeways, on and off street surface water drainage ditches, pipes, culverts, other drainage facilities, water and sewer facilities and public recreation facilities. The County is pursuing impact fees for schools at this time.A copy of the applicable sections of the Act is provided in this Appendix. 29 81 OCS Schools Impact Fee Report(DRAFT) Note: Only Title VI(Orange County Impact Fees)is shown. GENERAL ASSEMBLY OF NORTH CAROLINA 1987 SESSION CHAPTER 460 HOUSE BILL 917 AN ACT MAKING SUNDRY AMENDMENTS CONCERNING LOCAL GOVERNMENTS IN ORANGE AND CHATHAM COUNTIES. TITLE VI. ORANGE COUNTY IMPACT FEES. Sec. 17. G.S. 153A-331 is amended by identifying the existing provisions as subsection (a) and by adding new subsections to read: "(b) Impact Fees Authorized. (1) Orange County may provide by ordinance for a system of impact fees to be paid by developers to help defray the costs to the County of constructing certain capital improvements,the need for which is created in substantial part by the new development that takes place within the County. (2) For purposes of this subsection, the term capital improvements includes the acquisition of land for open space and greenways, capital improvements to public streets, schools, bridges, sidewalks, bikeways, on and off street surface water drainage ditches, pipes, culverts, other drainage facilities, water and sewer facilities and public recreation facilities. (3) An ordinance adopted under this subsection may be made applicable to all development that occurs within the County. (c) Amount of Fees. In establishing the amount of any impact fee, the County shall endeavor to approach the objective of having every development contribute to a capital improvements fund an amount of revenue that bears a reasonable relationship to that development's fair share of the costs of the capital improvements that are needed in part because of that development. In fulfilling this objective, the County shall, among other steps and actions: (1) Estimate the total cost of improvements by category (e.g., streets, sidewalks, drainage ways, etc.)that will be needed to provide in a reasonable manner for the public health, safety and welfare of persons residing within the County during a reasonable planning period not to exceed 20 years. The Board of County Commissioners may divide the County into two or more districts and estimate the costs of needed improvements within each district. These estimates shall be periodically reviewed and updated and the planning period used may be changed from time to time. (2) Establish a percentage of the total costs of each category of improvement that, in keeping with the objective set forth above, should fairly be borne by those paying the impact fee. (3) Establish a formula that fairly and objectively apportions the total costs that are to be borne by those paying impact fees among various types of developments. By way of illustration without limitation: a. In the case of street improvements,the impact fee may be related to the number of trips per day generated by different types of uses according to recognized estimates; 30 82 OCS Schools Impact Fee Report(DRAFT) b. In the case of drainage improvements,the impact fee may be related to the size of a development, the amount of impervious surface the development has, or other factors that bear upon the degree to which a development contributes to the need for drainage improvements made at public expense. (d) Capital Improvements Reserve Funds: Expenditures. (1) Impact fees received by the County shall be deposited in a capital improvements reserve fund or funds established under Chapter 159 of the General Statutes, Article 3, Part 2. Such funds may be expended only on the type of capital improvements for which such impact fees were established, and then only in accordance with the provision of subsection(2) of this section. (2) In order to ensure that impact fees paid by a particular development are expended on capital improvements that benefit that development,the County may establish for each category of capital improvement for which it collects an impact fee at least two geographical districts or zones, and impact fees generated by developments within those districts or zones must be spent on improvements that are located within or that benefit property located within those districts or zones. (e) Credits for Improvements. An impact fee ordinance shall make provision for credits against required fees when a developer installs improvements of a type that generally would be paid for by the County out of a capital reserve account funded by impact fees. The ordinance may spell out the circumstances under which a developer will be allowed to install such improvements and receive such credits. (f) Appeals Procedure. An ordinance authorizing impact fees as provided herein may provide that any person aggrieved by a decision regarding an impact fee may appeal to the Orange County Board of Adjustment. If the ordinance establishes an appeals procedure, it shall spell out the time within which the appeal must be taken to the board of adjustment,the possible grounds for an appeal and the board's authority in the matter, whether the fee must be paid prior to resolution of the appeal, and other procedural or substantive matters related to appeals. Any decision by the board of adjustment shall be subject to review by the superior court by proceedings in the nature of certiorari in the same manner as is provided in G.S. 153A-345. (g) Payment of Impact Fees. An ordinance authorizing impact fees as herein provided shall spell out when in the process of development approval and construction impact fees shall be paid and by whom. By way of illustration without limitation,the ordinance may provide that an applicant for a building permit shall submit the impact fee along with the permit application and that building permits shall not be issued until the impact fee has been paid. (h) Refunds. If this section or any ordinance adopted thereunder is declared to be unconstitutional or otherwise invalid, then any impact fees collected shall be refunded to the person paying them together with interest at the rate established under G.S. 105-241.1, being the same rate paid by the Secretary of Revenue on refunds for tax overpayments. (1) Limitations on Actions. (1) Any action contesting the validity of an ordinance adopted as herein provided must be commenced not later than nine months after the effective date of such ordinance. (2) Any action seeking to recover an impact fee must be commenced not later than nine months after the impact fee is paid." Sec. 17.1. Section 17 of this act shall apply only to Orange County, and applies only within the planning jurisdiction of Orange County. Sec. 18. G.S. 153A-340 is amended by identifying the existing provisions as subsection (a) and by adding new subsections to read: "(b) Impact Fees Authorized. (1) Orange County may provide by ordinance for a system of impact fees to be paid by developers to help defray the costs to the County of constructing certain capital 31 83 OCS Schools Impact Fee Report(DRAFT) improvements,the need for which is created in substantial part by the new development that takes place within the County. (2) For purposes of this subsection, the term capital improvements includes the acquisition of land for open space and greenways, capital improvements to public streets, schools, bridges, sidewalks, bikeways, on and off street surface water drainage ditches, pipes, culverts, other drainage facilities, water and sewer facilities and public recreation facilities. (3) An ordinance adopted under this subsection may be made applicable to all development that occurs within the County. (c) Amount of Fees. In establishing the amount of any impact fee, the County shall endeavor to approach the objective of having every development contribute to a capital improvements fund an amount of revenue that bears a reasonable relationship to that development's fair share of the costs of the capital improvements that are needed in part because of that development. In fulfilling this objective, the County shall, among other steps and actions: (1) Estimate the total cost of improvements by category (e.g., streets, sidewalks, drainage ways, etc.)that will be needed to provide in a reasonable manner for the public health, safety and welfare of persons residing within the County during a reasonable planning period not to exceed 20 years. The Board of County Commissioners may divide the County into two or more districts and estimate the costs of needed improvements within each district. These estimates shall be periodically reviewed and updated and the planning period used may be changed from time to time. (2) Establish a percentage of the total costs of each category of improvement that, in keeping with the objective set forth above, should fairly be borne by those paying the impact fee. (3) Establish a formula that fairly and objectively apportions the total costs that are to be borne by those paying impact fees among various types of developments. By way of illustration without limitation: a. In the case of street improvements,the impact fee may be related to the number of trips per day generated by different types of uses according to recognized estimates; b. In the case of drainage improvements,the impact fee may be related to the size of a development, the amount of impervious surface the development has, or other factors that bear upon the degree to which a development contributes to the need for drainage improvements made at public expense. (d) Capital Improvements Reserve Funds: Expenditures. (1) Impact fees received by the County shall be deposited in a capital improvements reserve fund or funds established under Chapter 159 of the General Statutes, Article 3, Part 2. Such funds may be expended only on the type of capital improvements for which such impact fees were established, and then only in accordance with the provision of subsection(2) of this section. (2) In order to ensure that impact fees paid by a particular development are expended on capital improvements that benefit that development,the County may establish for each category of capital improvement for which it collects an impact fee at least two geographical districts or zones, and impact fees generated by developments within those districts or zones must be spent on improvements that are located within or that benefit property located within those districts or zones. (e) Credits for Improvements. An impact fee ordinance shall make provision for credits against required fees when a developer installs improvements of a type that generally would be paid for by the County out of a capital reserve account funded by impact fees. The ordinance may spell out the 32 84 OCS Schools Impact Fee Report(DRAFT) circumstances under which a developer will be allowed to install such improvements and receive such credits. (f) Appeals Procedure. An ordinance authorizing impact fees as provided herein may provide that any person aggrieved by a decision regarding an impact fee may appeal to the Orange County Board of Adjustment. If the ordinance establishes an appeals procedure, it shall spell out the time within which the appeal must be taken to the board of adjustment,the possible grounds for an appeal and the board's authority in the matter, whether the fee must be paid prior to resolution of the appeal, and other procedural or substantive matters related to appeals. Any decision by the board of adjustment shall be subject to review by the superior court by proceedings in the nature of certiorari in the same manner as is provided in G.S. 153A-345. (g) Payment of Impact Fees. An ordinance authorizing impact fees as herein provided shall spell out when in the process of development approval and construction impact fees shall be paid and by whom. By way of illustration without limitation,the ordinance may provide that an applicant for a building permit shall submit the impact fee along with the permit application and that building permits shall not be issued until the impact fee has been paid. (h) Refunds. If this section or any ordinance adopted thereunder is declared to be unconstitutional or otherwise invalid, then any impact fees collected shall be refunded to the person paying them together with interest at the rate established under G.S. 105-241.1, being the same rate paid by the Secretary of Revenue on refunds for tax overpayments. (1) Limitations on Actions. (1) Any action contesting the validity of an ordinance adopted as herein provided must be commenced not later than nine months after the effective date of such ordinance. (2) Any action seeking to recover an impact fee must be commenced not later than nine months after the impact fee is paid." Sec. 18.1. Section 18 of this act shall apply only to Orange County, and applies only within the planning jurisdiction of Orange County. In the General Assembly read three times and ratified this the 23rd day of June, 1987. 33 85 OCS Schools Impact Fee Report(DRAFT) Appendix C: • • - For the purposes of school impact fee analysis and calculations, the following housing type categories were used. A brief description of each housing category is provided. Single Family Detached: a detached building located on a single lot containing one dwelling unit. In situations where an accessory dwelling unit (i.e., a "mother-in-law suite" or "granny flat") is located on the same lot,the principal dwelling is categorized as a Single Family Detached dwelling. Examples of single family detached dwellings are site-built houses and modular houses. Single Family Attached: a group of dwelling units which share a common floor-to-ceiling wall or share the wall of an attached garage or porch with an adjacent dwelling and in which all units have a ground- floor living space. Units are individually owned or intended to be individually owned after initial sales are complete. Examples of single family attached dwellings are duplexes, triplexes, townhouses, row houses, and condominiums in which all units have a ground-floor living space. Multifamily: a group of dwelling units which share a common floor-to-ceiling wall with an adjacent dwelling. All units may not have a ground-floor living space. Units may be individually owned (as is the case with condominiums) or may be owned by one entity and rented/leased to tenants. Also included in this category are dwelling units located above ground-floor non-residential (i.e., retail or office) uses. In situations where an accessory dwelling unit (i.e., a mother-in-law suite, granny flat, or efficiency apartment) is located on the same lot as a principal dwelling,the accessory dwelling unit is categorized as a multifamily dwelling provided the accessory dwelling unit is categorized as such by the local zoning code (i.e., less than 750-800 square feet, depending on the specifics of the local code). Examples of multifamily dwellings include apartments, condominiums in a multi-story building in which all units do not have a ground-floor living space, mother-in-law suites and granny flats located on a lot containing a separate principal dwelling, and dwellings located above non-residential uses. Manufactured Home: a dwelling built in a factory in accordance with the federal Manufactured Home Construction and Safety Standards, commonly referred to as the 'HUD' Code. Examples of manufactured homes are single-wide, double-wide, and triple-wide"mobile" homes. Age Restricted Unit: A dwelling, regardless of type (detached, attached, multi-family, etc.), located in a development that restricts the number of units with occupants aged under 55 years old and whereby the age restriction is achieved by deed restrictions, homeowners association documents, and/or restrictive covenants. 34 Attachment 3 86 Chapel Hill-Carrboro City Schools Current Fee %Change- (adopted at 60% Current Fee vs. Single Family Detached MSIF 90%MSIF 80%MSIF 70%MSIF 60%MSIF of 2007 MSIF) 60%of MSIF 0-3 BR $13,114 $11,803 $10,491 $9,180 $7,868 -31.1% 4+BR $25,139 $22,625 $20,111 $17,597 $15,083 32.0% Average $17,492 $15,743 $13,994 $12,244 $10,495 $11,423 -8.1% Single Family Detached<800 sq.ft. $3,8481 $3,4631 $3,0781 $2,6941 $2,309 included in SFD -79.8% Single Family Attached 0-2 BR $10,266 $9,239 $8,213 $7,186 $6,160 -6.8% 3+BR $16,414 $14,773 $13,131 $11,490 $9,848 49.0% Average $14,608 $13,147 $11,686 $10,226 $8,765 $6,610 32.6% Multifamily 0-2 BR $4,441 $3,997 $3,553 $3,109 $2,665 107.2% 3+BR $18,914 $17,023 $15,131 $13,240 $11,348 782.5% Average $6,990 $6,291 $5,592 $4,893 $4,194 $1,286 226.1% Manufactured Home 1 $6,9991 $6,2991 $5,5991 $4,8991 $4,1991 $4,939 -15.0% N/A-assessed by N/A Age Restricted Unit 1 $756 $680 $605 $529 $454 housing type Orange County Schools Current Fee %Change- (adopted at 60% Current Fee vs. Single Family Detached MSIF 90%MSIF 80%MSIF 70%MSIF 60%MSIF of 2007 MSIF) 60%of MSIF 0-3 BR $12,044 $10,840 $9,635 $8,431 $7,226 28.5% 4+BR $8,952 $8,057 $7,162 $6,266 $5,371 -4.5% Average $10,959 $9,863 $8,767 $7,671 $6,575 $5,623 16.9% Single Family Detached<800 sq.ft. $3,3171 $2,9851 $2,6541 $2,3221 $1,990 included in SFD -64.6% Single Family Attached 0-2 BR $3,665 $3,299 $2,932 $2,566 $2,199 26.2% 3+BR $5,558 $5,002 $4,446 $3,891 $3,335 91.3% Average $5,319 $4,787 $4,255 $3,723 $3,191 $1,743 83.1% Multifamily 0-2 BR $2,656 $2,390 $2,125 $1,859 $1,594 -8.6% 3+BR $20,677 $18,609 $16,542 $14,474 $12,406 611.8% Average $5,498 $4,948 $4,398 $3,849 $3,299 $1,743 89.3% Manufactured Home 1 $8,1271 $7,3141 $6,5021 $5,6891 $4,8761 $2,678 82.1% N/A-assessed by N/A Age Restricted Unit 1 $623 $561 $498 $436 $374 housing type 87 Attachment 4 Current School Impact Fees (Adopted December 2008) [The amount shown for the effective date of January 12, 2012 is 60% of the Maximum Supportable Impact Fee, as calculated during the study/analysis completed in 2007-08] Chapel Hill — Carrboro City Schools District Effective Effective Effective Effective January 1, January 1, January 1, January 1, 2009 2010 2011 2012 Single-Family Detached $6,092 $7,616 $9,520 $11,423 Single-Family Attached $3,525 $4,406 $5,508 $6,610 Multifamily $686 $858 $1,072 $1,286 Manufactured Homes $2,634 $3,293 $4,116 $4,939 Orange County Schools District Effective Effective Effective Effective January 1, January 1, January 1, January 1, 2009 2010 2011 2012 Single-Family Detached $3,000 $3,749 $4,686 $5,623 Single-Family Attached / $930 $1,162 $1,453 $1,743 Multifamily Manufactured Homes $1,428 $1,785 $2,232 $2,678