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HomeMy WebLinkAboutAgenda - 12-04-2006-5nORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 4, 2006 Action Agenda Item No. .~° SUBJECT: Consultant Contract -Education Facilities Impact Fees DEPARTMENT: Planning & Purchasing PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Scope of Work Craig Benedict, AICP, Planning Consultant Timeline Director, 245-2592 Pam Jones, Purchasing Director, 245-2652 PURPOSE: To authorize the negotiation of a contract with Tischler and Associates, Inc. for professional services related to analyzing and updating the County's Education Facilities Impact Fee Ordinance. BACKGROUND: Based on comments from the BOCC on October 17, 2006 a more elaborate timeline has been included as well as minor scope of services updates. Education Facilities Impact Fee Ordinance Orange County is one of the few counties in North Carolina that has legislative authority to assess impact fees through State legislation passed in 1987 with additional legislation in 1991. Besides the original analysis to initialize the impact fees in 1991, subsequent updating has occurred in 1994 and 1995. In late 2000, Orange County contracted with Tischler and Associates to develop Student Generation Rates and Impact Fee Studies. Tischler produced a study in early.2001 which provided the basis for adopted impact fee levels. Student generation rates were also a product of the study and are now used in the annual SAPFOTAC (Schools Adequate Public Facilities Ordinance Technical Advisory Committee) report to project the number of students expected in each school district from new development in'the coming years. The BOCC adopted a new Education Facilities Impact Fee Schedule at the June 25, 2001 meeting which became effective July 1, 2001. The adopted impact fee level was 56% of the Maximum Supportable Impact Fee (MSIF) for Orange County Schools and 60% of the MSIF for Chapel Hill-Carrboro City Schools. ~ ' 2 School Impact Fees in each school district currently are as follows: Oran a Coun School District Sin le Famil and Multi-wide Manufactured Homes $3,000 er unit Other Residential Units $1,420 er unit Cha el Hill-Carrboro School District Sin le Famil and Multi-wide Manufactured Homes $4,407 er unit Other Residential Units $1,979 er unit Given inflationary increases in land and school construction costs, there is a need to re-evaluate the current impact fees to determine if they are set at reasonable levels since the existing study used school costs from the 1990's. Additionally, the School Collaboration work group has been working on school construction standards (school land area, capacity, size, and cost) which are prerequisite data to include in the new analysis. Because Tischler and Associates is familiar with Orange County, the consulting firm leader in fiscal impact analysis, and will be updating and expanding upon their previous work, staff is recommending that negotiations with Tischler and Associates be permitted to proceed. The attached document "Exhibit A, Scope of Work" is an excerpt from the previous Tischler contract and represents the work that is contemplated in~this agreement. It is notable, however, that the recent planning staff data collection may make the student generation rate analysis easier for the consultant. Tischler and Associates may also be able to conduct Park Dedication and Payment in Lieu Fees analysis, once'the County develops certain parks standard criteria. Staff would bring the addendum back to the BOCC at that time. As a separate note, any related updates or revisions to the text of the ordinance to add clarity or anew policy will be timed to be concurrent with the impact fee amendments. FINANCIAL IMPACT: The School Impact Fee study is expected to cost between $50,000 to $60,000. As the Board may recall, a reserve was included in the 2006-2007 operating budget to cover three studies, to the extent $145,000 would allow: School Impact Fees, Phase III TDR Development Ordinance and Park Dedication and Payment-in-Lieu Analysis. The TDR Phase III work program will be presented for consideration at the next Board meeting. RECOMMENDATION(S): The Manager recommends that the Board direct staff to negotiate a final contract with Tischler and Associates to perform the outlined scope of work including the consultant timeline for an amount not to exceed $60,000; and to authorize the Manager to sign the resulting contract. "EXHIBIT A" SCOPE OF WORK A. Student Generation Rate Scope of Work The suggested tasks are discussed below. Task 1: Discuss. and Agree on Public School Student Generation Rate Methodology. Tischler & Associates, Inc. will meet with the client to discuss the various approaches to calculating public school student generation rates. Assuming mutual agreement as to the methodology and data to be utilized, Tischler & Associates, Inc. will prepare a memorandum summarizing the public school student generation rate methodology. Work Product: Memorandum Summarizing Public School Student Generation Rate Methodology Task 2. Public School Student Generation Rate Memoranda. Based on the above task, Tischler & Associates, Inc. will review the data provided by the County by District and by type of school and by type of house. Tischler & Associates, Inc. will raise any questions regarding data and supplemental information with appropriate County staff. Tischler & Associates, Inc. will then prepare a memorandum reformatting the data for inclusion in the impact fee report. The memorandum for each school district will list the public school student generation rate by type of housing unit for each type of school. Work Product: Public School Student Generation Rate Memoranda. B. Impact Fee Scope of Work Our scope of work is comprehensive. The proposed tasks are noted below. Task 1. Assess Current Impact Fee Program. The initial assessment of the County's current impact fee program pertaining to the two school districts will include reviewing existing impact fee methodologies previously completed by Tischler & Associates, Inc. in~2001. This will include the geographic sub- areas currently utilized in relation to the rational nexus requirements. The work in this task will be based on onsite interviews. We will recommend what changes should be made to the exiting school impact fees. We will prepare a draft memorandum discussing recommended impact fee changes, relating to methodological or policy issues. After mutually agreed upon changes are made, we will issue a final memorandum. Work Product: Memorandum Discussion Recommended Impact Fee Changes Task 2. Ascertain t_evel of Service for Each School District. Once the County and school districts in concept agree on the various choices noted previously, we will begin Section B, Task 2. One important subtask is calculating the appropriate level of service, which has already been completed through the countywide Schools Adequate Public Facilities MOU and Ordinance. Impact fees usually reflect the established levels of service for purposes of calculating the new demand, unless there are extenuating circumstances. We will determine the appropriate current level of service through additional onsite interviews with the service providers and analysis of local data for any special circumstances. As noted in the RFP, "existing school construction standards will be analyzed as well as the construction standards for new schools. This information will be used to project school capital improvement costs to 2012 and 2017. The above will enable us to ensure that two important impact fee legal requirements are met; namely the proportional benefit and the rational nexus relationships. The information from this task will be prepared in written format, which will then be submitted to the County and school districts for its review. As part of this task, we also will review cost estimates prepared by the County and each school district for all completed and planned infrastructure improvements for recent school construction. The certified 2005 SAPFO TAC report will be the basis of levels of service. Work Product: See Below Task 3. Review Capital Needs and Costs and Allocate to Growth. This task will determine relevant capital needs and.associated capital facility costs due to the proposed development. A. Lonq Range Capital Needs. In this subtask, Tischler & Associates, Inc. will further review the various students and other data germane to the relevant school categories. Tischler & Associates, Inc. will work with staff to forecast the capital facility needs due to development to 2012 and 2017. The discussions may include not only an understanding of the specific costs to provide the schools, but also include discussions pertaining to whether these capital facilities needs were due to normal replacement, catch-up, or new demand. B. Review Cost Estimates. In this subtask we will review, as relevant, the various capital costs for facilities. As part of this subtask, we will ascertain whether the facilities are likely to be bonded, and if so, the amortization schedule. As part of calculating the impact fees, the County may include the construction contract price; the cost of acquiring land, improvements, materials and fixtures; the cost for planning, surveying, and engineering fees for services provided for and directly related to the construction system improvement; and debt service charges, if impact fees are used to pay the debt service to finance the cost of the system improvements. "The work product will reflect the appropriate Orange County construction and space standards for public elementary, middle and high school building areas and costs and the projection of school capital improvement costs to 2012 and 2017." Work Product: Capital Improvement Needs Accommodating New Growth 5 Task 4. Calculate "Credits" to be Applied Against Capital Costs. A consideration of "credits" is an integral part to the development of a legally valid impact fee calculation methodology. There is considerable confusion among those who are not immersed in impact fee law about the definition of a credit and why it may be legally or equitably required. There are, in fact, two (2) types of "credits," each with specific, distinct characteristics, but both of which will be included (or at least considered) in the development of all impact fees. The first is a credit due to possible double payment situations. This could occur when future contributions are made by the property owner toward the capital costs of the public facility already covered by the impact fee. The second, which we will call an adjustment (as opposed to a credit), is a credit toward the payment of an impact fee due for the required dedication of public sites and/or public improvements provided by the developer and for which .the impact fee is imposed. This task will credit, as appropriate, new development based on housing type and value with public school facilities costs already incurred through property taxes; sales taxes and other sources of funding. Work Product: See Impact Fee Report Below Task 5. Conduct Funding Source and Cash Flow Analyses. In order to calculate the feasible capital improvements needs required by each school district over time as development occurs, it is important to evaluate the anticipated funding sources. In this subtask, we will prepare a cash flow analysis which indicates the sources of funding, independent of impact fees. This calculation will allow the County and each district to better understand the various revenue sources available, including impact fees and the additional amount which might be needed if the impact fees were not adopted or were discounted. It will also provide a good. understanding of the cash flow needed to cover the capital facilities both for existing and new development. The initial cash flow analysis will indicate whether additional funds might be needed or whether the. capital improvements schedule might need to be changed. This could also affect the total credits calculated in the previous task. Therefore it is likely that a number of iterations will be conducted in order to refine the cash flow analysis reflecting the capital improvement needs. We believe that this is an extremely important component of an impact fee analysis; and, that the absence of this analysis frequently distorts the impact fee analysis and fee schedules. Work Product: Cash Flow Analyses Reflecting Public School Capital Improvement Needs and Applicable Impact Fees Task 6: Compete Impact Fee Methodology and Calculation. The completion of the above tasks will enable the impact fee methodology to be appropriately and equitably determined and finalized. The impact fee that results from this methodology will be the maximum legally defensible fee for new development in the two Orange County school districts that could be charged while meeting all the statutory requirements for impact fees. (The Client will subsequently decide what percentage of the maximum justifiable fee it wants to charge.) Work Product: See Impact Fee Report Below Task 7. Preparation of Public School Impact Fee Reports. We will prepare a draft report for each district which summarizes the basis and need for the impact fees for the appropriate district and which provides the relevant methodology for determining the fee amount. The report will include at a minimum the following information: . • Executive Summary • A detailed description of the methodologies used during the study • A detailed description of all formulas used and accompanying rationale • A detailed schedule of proposed fees listed by land use type and activity • Summary of capital improvement needs generated by the new development • Other information which explains and justifies the resulting recommended impact fee schedules After client review, we will make mutually agreed upon changes and produce five copies of the final report for each district. The impact fee report will have flow diagrams clearly indicating the methodology and approach, 'a series of tables for each activity showing all of the data assumptions and figures, and a narrative explaining all of the data assumptions, sources and methodologies. The report will be a stand-alone document which will be clear, concise and readily understood by all interested parties. Because of our extensive experience in calculating impact fees and preparing such reports, we have developed a very succinct written product which provides the client with swell-understood paper trail. Work Product: Public School Impact Fee Reports Task 8. Meetings/Presentations. Since we intend to work as part of a team and view ourselves not only as technical consultants but also as facilitators, we anticipate and have included in this work program several onsite staff meetings (to include county and school personnel) during this assignment. We also will attend three public hearings to explain the analysis and conclusions. Work Product: Appropriate Materials and Graphics Task 9. Provide Revised Impact Fee Automated Spreadsheefi-Based Models. We will provide an automated spreadsheet model to allow each district to calculate the impact fees. The model will be compatible with each district's existing computer system. An easy to understand manual will be provided as part of this task. We have provided similar models to other communities and they have proven to be readily implemented and utilized. This will track impact fees by location and type of housing. Work Product: Impact Fee Automated Spreadsheet-Based Models with Supporting Documentation EDUCATIONAL FACILITIES IMPACT FEE Consultant Timeline (1st Week): December '06 (2°d & 3rd Week): December '06 (4`~` Week): December '06 (IS` Week): January '07 Contract approval (a)Consultant receives school APFO data from Planning (b)Consultant receives fiscal 'financial and CIP data from budget and Finance Departments Consultant does preliminary work on tasks 3, 4, and 5 Planning staff provides student generation rate data (IS` thru 3rd Week): January '07 Consultant work on tasks 1 thru 6 (3rd Week): January '07 Preliminary draft~for review by staff (Isr Week): February '07 Request to BOCC for legal advertisement (3~ Week): February '07 Final draft (4TH' Week): February '07 BOCC quarterly public hearing March/April '07 BOCC adoption (effective July'07) C:\Documents and Settings\mallison\Local .Settings\Temporary Internet Files\OLK2D\Educational Facilities Impact Fee.doc