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HomeMy WebLinkAboutAgenda - 04-11-2000-4ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 11, 2000 Action Agenda Item. No. SUBJECT: Pro osed A reement for Student Generation Rate and Im act Fee Studies DEPARTMENT: Planning 8~ Inspections PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Tischler and Associates Proposal Form of Proposal TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 INFORMATION CONTACT: Craig Benedict, ext 2592 PURPOSE: To consider awarding a proposal to Tischler and Associates, Inc, for professional services associated with the Student Generation Rates and Impact Fee Studies; and to authorize the Manager to sign an agreement reflecting substantially the terms of the attached proposal. BACKGROUND: The Board of County Commissioners adopted three goals (Public Schools Impact Fees, Adequate Public Facilities, and Analysis of Impacts of Growth) in June 1999 that address the need to conduct studies on student generation rates and impact fees. Existing analysis on bath issues was originally conducted in 1994 and 1995 and in recent years, the need to verify and/or update the previous findings has become clear. OR/Ed Laboratories conducted student enrollment studies approximately five years ago using data from existing school databases. Their findings paralleled the Department of Public Instruction's projections. In view of the actual increases in enrollment that have occurred versus the OR/Ed projections showing waning growth, it is reasonable to conclude that the OR/Ed work may not have resulted in the most accurate information being applied at that time for future school planning. OR/Ed projections need to be updated, and while the new studies may also employ current data used by the school districts, the use of complementary sources of student information and Planning staffs monitoring of the process will lead to more credible results. Another element in favor of these new studies is the need to empirically test various assumptions that have been informally applied for student generation rates in the two school districts: Another reason is to examine the need for, and cost of providing, new school space for the growing student population that would support a request from the Orange County Board of Education to increase the impact fee in the Orange County School District. Furthermore, the Triangle Apartment Association has expressed interest in an examination of any differences that may exist in student generation rates between housing types, which is a planned element of the study. The basis for changes to an existing program of school impact fees necessitates an objective, professional and legally defensible report. A request for proposals (RFP) to conduct a study of Student Generation Rates and Impact Fees based on requirements established by the Planning and Purchasing Departments was circulated in early December 1999. Twenty two firms were solicited, with two responses received on January 7, 2000. The proposal costs cited in the responses ranged from $59,200 to $76,660. Tischler and Associates, a firm with the, requisite expertise as outlined in their proposal and with national experience in similar public sector impact fee analysis, submitted the lowest proposal. The Planning Director has negotiated with Tischler in an effort to reduce the overall cost of the work. Tischler has agreed to reduce the cost to at least $53,400, with additional reduction possible if the County can: ^ Reduce the amount of time Tischler would need for data collection by collaborating with the schools to obtain additional information; and/or ^ Provide additional analysis of the data in-house; and/or ^ Agree upon a modified training schedule for staff. The Board may decide to develop a differentiated rate of impact fees based on housing type from information from the studies. Tischler anticipates completion of the studies within 90 days of execution of a contract, as outlined in the time chart on the last page of the proposal. Based on this timeline, any amendments to the impact fee would be scheduled for the August 28, 2000 quarterly public hearing. FINANCIAL IMPACT: The cost of the studies is not to exceed $53,400. The price is affected by the need to conduct a separate analysis for each school district,, since information such as student generation rates and housing values are likely to be different in the two districts. Budgeted funding for the anticipated studies in FY 1999-2000 was proposed at $46,000. At the June 15, 1999 budget work session, the. Board agreed to reduce the amount budgeted for these studies to $23,000, citing the intention to make an appropriation from contingency if the Board should decide to proceed with the studies and additional funds should prove necessary. There are adequate unallocated funds remaining in the Commissioners' contingency account to cover the remaining balance of $30,400 for these studies. The Triangle Apartment Association previously expressed a willingness to contribute an unspecified amount to obtain an objective analysis of student generation rates by housing type. If the Association is still willing to contribute with no pre-conditions as to action the BOCC will ar will not take based on the studies' results, there is potential for the Contingency appropriation to be reduced by the amount of that contribution, if the BOCC wishes to accept the Triangle Apartment Association's participation in funding the studies. RECOMMENDATION(S): The Manager recommends that the Board Award the proposal to Tischler and Associates in an amount not to exceed $53,400; appropriate $30,400 from the Contingency account; and authorize the Manager to sign an agreement incorporating substantially the same terms as the attached proposal, subject to final review by staff and the Caunty Attorney. .~' i "r. a~ PROPOSAL FOR STUDENT GENERATION RATE AND PUBLIC SCHOOL ,.I IMPACT FEE STUDIES Prepared for Orange County, North Carolina January 3, 2'000 Prepared by: ~. '~"` Tischler & Associates, rnc. • Fiscal, Economic & PlanningConsultants in association with Freilich, Leitner & Carlisle Land Use Law & Planning 3 i - 4 TABLE OF CONTENTS I. BACKGROUND OF CONSULTANT TEAM ............................................]. TlscxLR & A. TYscHt.ER & Asso ASSOQATFS, ITVC. cIATES, INC. (TA) ......................................................:....1 B. FREILICH, LETTNER & CART.ISLE (FLC) ........................................................2 47015angamore Road II. BACKGROUND OF RELEVANT STAFF .................................................2 Suite N210 Bethesda, MD 2081fi (301)320-ssoo III. OVERVIEW ...................:..........................................................................:....3 Fax: (301) 32D-4860 IV. APPROACH .................:.....:............................................................,..............3 80 Annandale Road Pasadena, CA 91105-1404. V. STUDENT GENERATION RATE METHODOLOGY AND SCOPE OF ($18) 790-6170 Fax: (818) 790-6235 WORK .......................................................................................................:..............4 (800) 424-4318 A. METHODOLOGY FOR ST[JDENT GF_IVERATION RATE ......................................4 B. SCOPE OF WORK ..........................................................................:................5 tischlerassociates.com Task 1: Discuss and Agree on Initial Public School Student Generation Rate Methodolagy ............................................................................5 Task 2: Conducting Survey ............:..............................................................6 Task 3: Preparation of Public School Student Generatian Rate Reports....6 VI. >~MPACT FEE METHODOLOGY AND SCOPE OF WORK ..................6 A. IMPACT FEE METHODOLOGY ........................................................................6 B. SCOPE OF WORK .............................................:.............................................7 Task 1. Assess Current Impact Fee Program ............................................... 7 Task .~. Review Capital Needs and Costs and Allocate to Grawth ................. T Task 5: Conduct Funding Source and Cash Flow Analyses ........................8 Task 6: Complete Impact Fee Methodology and Calculation ......................9 Task 7. Preparation of Public Schoal Impact Fee Reports ..........................9 Task 8. Meetings/Presentations ....................................:.............................10 Task 9. Provide Revised Impact Fee Automated Spreadsheet-Based Madels ............................................................................................. I 0 _ _ VII. DELIVERABLES ................:.......................................................................1d VIII. TIME ............::...............................................................................................11 IX. COST .............................................:...............................................................11 X. EVALUATION CRITERIA ..........................................................:.............11 XI. USER REFERENCES .................................................................................12 Fscal Impact Analysis Capital Facility Analysis • APPENDIX I - Relevant Reprints and TA Fiscal & Ecanomac Newsletters Impact Fee Systems • APPENDIX II - Relevant Experience Growth Policy Planning Economic and Market Analysis APPENDIK III - Resumes ^'~ T>sc>F~R ~ Assocr~-~s, INC. 4701 Sangamare Road Suite N210 Bethesda, MD 20816 (301) 320-6900 Fax: (301) 320-4860 80 Annandale Road Pasadena, CA 91105-1404 (B1a) 7so-s17o Fax: (818) 790-6235 (800) 424-4318 tischlerassociates.com Fiscal Impact Analysts Capital Facility Analysts Impact Fee Systems Growth Policy Planning Economic and Market Analysis January 3, 2000 Director of Purchasing and Central Services Orange County 132 East King Street PO Box 8181 Hillsborough, NC 27278 Dear Sir or Madam: On behalf of Tischler & Associates, Inc. (TA), it is our pleasure to submit this proposal for conducting the student generation rate and public school impact fee studies. The address of our main office is 4701 Sangamore Road, Suite N210, Bethesda, Maryland 20814. Our toll-free telephone number is 1-800-424-4318. TA will be primarily responsible for these studies. However, Freilich, Leitner & Carlilse (FI,C) a law firm specializing in land use issues, will participate in this assignment by reviewing the various policy issues, methodologies and the existing impact fee ordinance in order to recommend any changes. There are several points we would like to note which make this proposal unique. 1. TA is a firm s ecializin in fiscal im act anal sis im act fees and revenue strategies. TA has conducted over 300 fiscal impact evaluations for jurisdictions throughout the country. In many of these evaluations we have included school districts. That is, we have worked with the school district in forecasting the change in student enrollment by development scenarios, and reflected levels of service regarding capital costs as well as operating expenses and calculated the fiscal impact regarding schools. We have also prepared over 400 impact fees, more than any other firm in the country. None of these fees has been challenged. One of these is Chatham County. We are very aware of the possible approaches to obtaining appropriate student generation rates, issues pertaining to the calculation of impact fees by unit type size, bedroom count, etc., and other relevant topics. Finally, we also recommend revenue strategies, as discussed later in this proposal. In addition to our unsurpassed fiscal impact and impact fee experience, we are familiar with the immediate Orange County area. As noted, we completed the public school impact fees for Chatham County. We are currently consulting with Cary and Holly Springs. This has given us familiarity regarding state as well as local issues as they pertain to planning, development ,pressures, housing trends and state school funding requirements. 2. The work sco a is time and cast effective as well as com rehensive. Because of our.extensive experience relating to impact fees as well as fiscal analysis, and our familiarity with the area, we can complete the appropriate studies within a 90-day time frame. Mi wiFC Ficrai c R rai~u 6 In addition to this timeliness, the work scope discussed further in the proposal is comprehensive. It includes the important component of cash flow analysis for each of the schpol districts. It also includes comments from a legal perspective on policy issues raised and the existing ordinances . as they may be affected by the new impact fee structure andlor methodology. There is also an optional task discussed in the body of the report. Paul Tischler has the authority far signing the formal contract with the County. Please let me know if you have any questions. We look forward to working on this assignment. Si rely, Paul S. Tischler I. BACKGROUND OF CONSULTANT TEAM I The background of the two firms are discussed below. Tiscr~R 8c ~~~ IivG A. Tischler & Associates, Inc. (TA) I 4701 Sangamon Road TA has been in business over 20 years. It has five full-time employees. The Suite N210 company is anon-public solely-owned company. It will provide a copy of a Bethesda, MD 20816 financial statement rior to si in an contract or a final selection, if r uested. ' (301) 320-6900 p $n $ Y ~1 Fax (301) 320-48fi0 TA has more experience with impact fee systems than any other firm in the country. e0 Annandale Road It has prepared over 400 fees. Listed below are same of our impact fee clients. ~. Pasadena, CA 91105-1404 (818) 790-6170 Avondale, AZ Woods Cross, UT Fax: (818) 790-6235 Casa Grande, AZ Albuquerque, NM (800) 424-4318 Globe, AZ Las Cruces, NM Goodyear, AZ Taos, NM tischlerassociates.com Peoria, AZ West Des Moines, IA Prescott, AZ Village of Hudson, WI Queen Creek, AZ Eau Claire, WI Scottsdale, AZ Naperville,lL Show Low, AZ Delaware, OH Surprise, AZ Beavercreek; OH Tolleson, AZ New Castle Co., DE Boulder, CO Calvert Co., MD Erie, CO Charles Co., MD Johnstown, CO Carroll Co., MD American Fork, UT Cecil Co., MD . Brigham Ciry, UT Frederick Co., MD Clearfield, UT Queen Anne's Co., MD Clinton City, UT Washington Co., MD Draper, UT Worcester Co., MD Farmington, UT Suffolk, VA ' ~ Hyde Park, UT Isle of Wight, VA Kaysville, UT Chatham Ca., NC North Logan, UT Nags Head, NC I PleasanC Grove, UT Hony Co., SC Salt Lake Co., UT Manatee Ca., FL Salt Lake Co. Sewer Imp. Dist. No. 1, UT Polk Co., FL ' Spanish Fork, UT - Deerfield Beach, FL Wellsville, UT Key Biscayne, FL Not only does TA bring relevant public sector experience to this assignment, but it Fiscal Impact Analysis also offers private sector experience a5 well. In all cases in which TA conducted work Capital Facility Analysis far the private sector, the impact fees have been eliminated or reduced. In Carroll ' Impact Fee systems County, the fees were reduced from $8,720 to $2,700 after TA critiqued the study. The County, with private sector approval, subsequently hired TA to do additional Growth Policy Planning work and also "redo" the original fees that TA critiqued. Economic and Market Analysis 8 In Montana, TA is an expert witness for the Bozeman Hamebuilders Association in litigation against the City. (On the other hand, TA has just begun impact fee wark for the City and County of Missoula.) Paul Tischler was an expert witness in two recent lawsuits. In the first, he was the expert witness for the Dayton Homebuilders Association against the City of Beavercreek, Ohio. The court found for the Homebuilders Association in ruling against a road impact fee. The City is liable to refund over $2.S million. Mr: Tischler was also an expert witness for the Des Moines Homebuilders Association. The court ruled in .favor of the Homebuilders in its suit regarding a pazk impact fee in the City of West Des Moines. The City is liable to refund over $2 million. TA has impact fee and fiscal analysis experience in a number of North Carolina communities. The impact fee experience includes preparation of school impact fees in Chatham County and helping to prepare a number of impact fees in Nags Head: Fiscal impact issues were conducted by TA for the North Carolina jurisdictions of Cabarrus County, Currituck County, Wilmington-New Hanover County, Raleigh, Cary, Holly Springs, Salisbury, Davidson and Greenville. (Please see a very recent letter in Appendix I from a North Carolina Economic Developnrment Administration member regarding TA's work in Holly Springs.) B. Freilich, Lehner & Carlisle (FLC) FLC is working with TA on several impact fee assignments. Very germane to this RFP is the fact that Marty Lehner, Mark White and the FLC lawyers also have a planning background. FLC, which has 9 employees, has extensive knowledge regarding impact ordinances and case law throughout the country. Mark White is licensed to practice in North Carolina. FLC's legal background will be of benefit in addressing the policy issues that arise in this assignment as well as reviewing the County's current impact fee ordinance. II. BACKGROUND OF RELEVANT STAFF Paul Tischler and Dwayne Guthrie will be the principal participants for TA. They have over 40 years of collective experience in fiscal impact, capital facility and impact fee evaluations. Paul Tischler and Dwayne Guthrie have more collective impact fee experience than any other consultant team. Dwayne spends over 9p% of his time solely on impact fee work. Mr. Tischler, who has a BA in Economics and MBA in Real Estate and Urban Development, has spoken to a variety of groups on .impact fees, including the American Planning Association, Nataanal Association of Homebuilders, Urban Land Institute and Government Finance Officers Association. He has also authored a number of articles on impact fees and fiscal analysis. Two of these articles were printed in the American Planning Association Plannin Magazine and the National Association of Homebuilders Land Develo ment Magazine. The titles were " 20 Points ta' Know About Impact Fees" and "Impact Fees -Understand Them or Be Sorry". Please see Appendix I for these reprints. Paul has given workshops on impact fees and revenue exactions. Mr. Guthrie, who has a BA and a Master, of Urban and Regional Planning, has considerable experience in planning, fiscal evaluations, capital improvement pragramnung, and impact fee studies. He has over eight years experience in the public sector. Mr. Guthrie has developed impact fee software models, prepazed over 300 impact fees, and been an expert witness on the topic. He was a contributing author on the manual produced by the National Association of Industrial and Office Parks (NAIOP) on infrastructure and impact fees. He has advised the Georgia Department of Community Affairs on their impact fee manual. He has presented the impact fees methodology fv a number of County, City and Town Councils. Dwayne and Paul were co-authors of the just published ICMA (International City/County Management Association) IQ Report, "An Introduction to Infrastructure Financing." (See the reprint in Appendix I.) Please see their complete resumes found in Appendix III. Marty Leitner has a BA, MA and JD. As reflected in his resume in Appendix III, Marty has extensive experience in legal mechanisms regarding land use and impact fees. Mazk White has a BA and JD and has over l0 yeazs of relevant experience. He also has a Masters of Urban & Regional Planning and is an AICP. Mark received his Juris Doctor and Masters from Chapel Hill. He is licensed to practice in North Carolina. He is worid.ng with TA on impact fee assignments in the states of Arizona, Montana, Massachusetts, Maryland and Florida. This includes preparation of the Pasco County Florida School impact fees. Our expertise and focus on the topics called for in this RFP will allow us to expeditiously perform this study. III. OVERVIEW Since both school districts in Orange County are experiencing high growth and the school districts have an objective of requiring new growth to pay its fair shaze of school capital facilities cost, there is a need to update the public school student generation rates for each district and also to recalibrate and update the school impact fee to reflect the most appropriate methodologies and latest data and still be legally defensible. It is also important that as part of the work effort there be a cash flow analysis for each district to show the amount, if any, of funding shortfalls for which each district and/or the County will be responsible. IV. APPROACH There are several components to the overall approach. One is the quality control and the other is technical. These are discussed in turn. 1. ualit Control. We believe a major reason for our national reputation for fiscal analysis and impact fees and other revenue exactions is the quality control approach to our work products. We bring a "devil's advocate" approach to this assignment. That is, we will evaluate the information and data in terms of being supportable and sustainable. Another part of the quality control consideration is our national expertise in the areas of financial analysis and economics, capital improvement planning, revenue strategies, land use, demographics, growth policy analysis and land use law. ~~ 2. Technical Approach. ~ For the student generation rate studies, there are several technical approaches that could be taken to calculate the rate. As with mast methodologies, there are trade- offs between each of them. We describe the possible methodologies in the next section. Suffice it to say that it is important to understand the trade-offs from a policy, political, legal, financial and land use perspective. For the impact fees, it is important to follow a methodology which evaluates all relevant levels of service, casts as well as Credits, in order to make sure that the impact fees meet the requisites of case law. In addition, we believe it is important to include a cash flow analysis, which indicates the extent to which the school district/county needs to provides additional funding beyond that which impact fees provide in order to meet the new school needs. V. STUDENT GENERATION RATE METHODOLOGY AND SCOPE OF WORK The passible methodologies for the public school student generation rate studies is discussed first. This is then followed by the scope of work which will result in the student generation rate reports. A. Methodology far Student Generation Rate. The RFP indicates that individual rates are to be determined for up to five different housing types and, by bedroom taunt (up to four different bedroom counts). TA agrees .that pupil generation rates should vazy by different housing types sines usually there is data that indicates differential pupil generation rates by type of housing. It is far less clear regarding bedroom count. Based on statistical analysis in the Denver metropolitan area, for example; it was shown that five bedroom houses generated fewer children than three bedroom units, TA's experience has been that in many districts, and each district is unique, the more expensive housing, which usually has .more bedrooms, may have a lower public school generation rate than a ~three- bedroom less expensive house. This issue is further clouded with the concept of what is considered a bedroom and whether it is currently being used as a bedroom or not. Depending on the housing market and the price of the house, it is also passible that dens, attics and/or basements have been completed which can be utilized as a bedroom. These issues are further discussed in task one in the next section. There are several possible approaches to deriving the student generation rates. Assuming cooperation from the school districts, the most successful approach is to have middle and high school students fill out aone-page questionnaire during a homeroom period which asks the basic questions needed far this study, For elementary school children, the questionnaire with an introductory paragraph to parents, is taken home with the child. This approach has worked successfully, in deriving accurate student generation rates. If the focus is an new housing, a -definition of new housing is needed. Another possible approach is to conduct a telephone survey of a sample of families based an information of address and phone number. Similar questions would be asked to that in the written survey. A third approach is to physically conduct a survey of selected housing developments and housing units within the development. Again the same questions would' be asked. ~1 The eventual sample will be agreed upon to be statistically valid in determining the number of school-aged children by housing type. The survey would be conducted by taking a sample size that would produce a 95°Io confidence interval of +/- 3%. A random sample could be selected to ensure this outcome generates statistically valid results within the described parameters. If bedroom count is needed, the next step would need to be ascertaining the bedroom count by type of total housing unit for new or all units as mutually agreed upon. The mast reliable approach would be to conduct a survey of additional hausing~units in the particular subdivision and asking questions regarding bedroom count. This would be more accurate than relying on originally submitted building plans since it is likely that a number of bedrooms, or substitutes thereof, would have been added or deleted in the housing unit over time. This could occur even if the house were. three to five years old. The issues regarding the methodology for student generation rate is a topic of the first task. The software program "to gage the school impact of each development" by type of housing unit is discussed in the impact fee study. The proposed methodology for projecting public - school student enrollment to 2005 and 2010 is also. discussed in the impact fee methodology. B. Scope of Work The suggested tasks are discussed below. ~ Task 1: Discuss and A ee on Initial Public School Student Generation Rate Methodolo TA will meet with the client and personnel from bath school districts in a joint meeting to further discuss the various approaches to calculating public school student generation rates. Prior to this meeting, TA will discuss with each school district the types of data that is available for identifying the location by house by type of student far each district. At the meetings, the various advantages and disadvantages to the different methodologies described above will be discussed. Legal, monitoring, as well as other issues would be included in this . discussion far each of the passible approaches. If it is agreed that the approach of having middle and high school students and parents of elementary students fill out the one-page questionnaire is feasible, then the sample size of the public school students will be aver 90%. There will still be an issue of how to obtain a goad sample of total housing unit bedroom count by .type in each of the districts, assuming this is needed. The sample size and passible approaches will be discussed if the survey form approach indicated above is not pursued. Based on the onsite meeting, TA will prepare a draft memorandum and have discussions with FL.C. Any legal issues or concerns will be addressed with the client before submitting the draft memorandum for the client's review. After mutually agreed changes are made, the final 1 memorandum will be issued. Work Product: Memorandum on Public School Student Generation Rate Methodology ~.z Task 2: Conducting Survey. If the approach of the students filling in the one-page survey form is not taken, we will conduct a sample survey of the approach that is agreed upon for collecting the appropriate data, After this pre-test is reviewed and agreed upon, then the full sample will be pursued. Once the student generation rates are obtained by housing .type and bedroom count (if appropriate), these results will be tabulated. If there is a need to obtain a sample of total housing units, with and without public school students and their ,bedroom count, apre-test will also be conducted for the approach taken. After this is agreed upon, then a statistically valid sample will be taken. It should, be noted that the samples will adhere to each district. It is anticipated that the student generation factors will differ by district by housing unit. There are two written products that are anticipated in this task. The first is a memorandum on the results of the pre-test, if appropriate. The second product would be the results of the findings of the tabulation. , Wark Product: Memoranda on Pre-test (if appropriate) and Final Results Task_3;_ _ Preparation of Public School Student Generation Rate Reports. Based on the above tasks, TA will prepare a report for each of the school districts on the public school student generation rate by type of housing unit, and by bedroom count, if appropriate. The report will be easy to understand and have appropriate graphics and tables. It will have a concise executive summary. A draft will be prepared far the client for review. After mutually agreed changes are made, the final report will be issued. Wark Product: Public School Student Generation Rate Reports VI. IMPACT FEE METHODOLOGY AND SCOPE OF WORK The methodology to be utilized is discussed first. This is followed by the scope of work for the preparation of the school impact fees for each of the districts. A. Impact Fee Methodology A's discussed in the specific tasks below, .the impact .fee methadology utilized by TA will include analyzing the existing school construction standards as well as the construction standards for new schools. As part of the forecast of capital improvement needs that will be utilized for the impact fee analysis as well as the cash flow, the. school capital improvement costs 2005 and 2010 would be projected. Also as part of the methodology, appropriate credits would be deducted in the calculation of the impact fee in order to avoid the double payment issue. , 13 B. Scope of Work As noted in our cover letter, 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. This. will include the geographic subareas 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 existing 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 Discussing Recommended Impact Fee Changes Task 2. Ascertain Level of Service for Each School District. Qnce the County and school districts agree on the various choices, we will begin Task 2. Qne important subtask is calculating the appropriate level of service. Impact fees usually reflect the existing 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. 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 2005 and 2010. 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 a 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 each school district for all completed and planned infrastructure improvements. Work Product: See Below Task 3. Review Ca ital 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. Long. Range Capital Needs. In this subtask, TA will further review the various studies and other data germane to the relevant school categories. TA will work with staff to forecast the capital facility needs due to development to 2005 and 2010. 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 cast far planning, surveying, and engineering fees for services provided far 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. As requested in the RFP, "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 2005 to 2010." Work Product: Capital Improvement Needs Accommodating New Growth Task 4. Calculate "Credits" to be A lied A ainst Ca ital Costs. A consideration of "credits" is integral 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. As indicated in the RFP, 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 S: Conduct Fundin Source and Cash Flow Anal ses. 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. Xn 1s 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 far 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: Com lete Im act Fee Methodolo and Calculation. The completion of the above tasks will enable the impact fee methodology to be appropriately and equitably determined and finalized. Per the RFP, the impact fee that results from this methodology will be the maximum legally defensible fee far new development in the two Orange County school districts that could be charged while meeting all of the statutory requirements far 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. Pre oration of Public School Trn act Fee Re orts. We will prepare a draft report for each district which summarizes the 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: s • 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 flue copies of the final report for each district. ' a 16 The impact fee report will have. flow diagrams clearly indicating the methodology and approach, a series of Cables far 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 awell-understood paper trail. Work Product: Public School Impact Fee Reports Task 8. Meetin~s/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 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 Spreadsheet-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. Work Product: Impact Fee Automated Spreadsheet-Based Models with Supporting Documentation VII. DELIVERABLES The specific deliverables are summarized and shown by task below for the student generation rates and impact fee reports. TASK DELIVERABLE Student Generation Rate Task 1: Discuss and Agree an Initial Public Memorandum on Public School Student Schaal Student Generation Rate Generation Rate Methodology Methadalo Task 2: Conducting Survey Memoranda on Pre-test (if appropriate) and Final Results Task 3: Preparation of Public School Student Public School Student Generation. Rate Generation Rate Re arts Re orts 4 TASK w 9 nF.r .rVF.R A Rr .F I7 Im act Fee Task 1: Assess Current Impact Fee Program Memorandum Discussing Recommended Im act Fee Chan es Task 2: Ascertain Level of Service for Each See Below School District Task 3: Review Capital Needs and Costs and Capital Improvement Needs Allocate to Growth Accommodatin New Growth Task 4: Calculate "Credits" to be Applied Against -See Impact Fee Report Below Ca ital Costs - Task 5: Conduct Funding Source and Cash Flow Cash Flow Analyses Reflecting Capital Analyses Improvement Plan(s) and Applicable Im act Fees Task 6: Complete Impact Fee Methodology and See Impact Fee Reports Below Calculation Task 7: Preparation of Public School Impact Fee Public School Impact Fee Reports Re orts Task S: Meetin s/Presentations A ro riate Materials and Gra hics Task 9: Provide Revised Impact Fee Automated Impact Fee Automated Spreadsheet-Based Spreadsheet-Based Models Models with Supporting Documentation VIII. TIME The time frame for completion is estimated to be about three months. Please~see the time chart on the following page. IX. COST w a The maximum cast is shown on the form of proposal. X. EVALUATION CRITERIA A few comments follow regarding the evaluation criteria noted in the RFP • TA focuses an impact fee systems and has prepared the mast in the Country Over 90% of our clients are public sector, we have extensive local government experience. • TA also focuses an fiscal analysis and has conducted the most evaluations in the Country. • Our company location in Bethesda, Maryland is conveniently located to the three Washington area airports, which have over 20 flights in each direction to Raleigh. The walk-up fare for many of these is $70. Also we will be working on other assignments in. the immediate area during the same time. • Given our public sector experience in impact fees, we have excellent presentation slides. 0 18 cc o c :- _ ~ ~o ~ m c U ~ ~~ o ~ Z °~ ~; .~ c ~ ~ ~- 0 U ~ ~ ~OU ~ O ~ p Ar f:.